California Tech CEO Charged with Smuggling $300 Million Worth of GPU Servers to China

Federal agents detained Greg Lui, the founder of California‑based Earthmade Computer Inc., on Oct. 1, 2026, accusing him of orchestrating a multi‑million‑dollar operation that exported high‑performance graphics processing unit (GPU) servers to China in violation of U.S. export controls.

According to the indictment, Earthmade allegedly fabricated customer documentation to disguise the true destination of the hardware, routing shipments through third‑party logistics firms that concealed the final Chinese recipients. Prosecutors say the scheme involved more than $300 million worth of equipment, including cutting‑edge AI accelerators that the U.S. government classifies as dual‑use technology.

The Department of Justice’s Computer Crime and Intellectual Property Section highlighted that the servers in question are integral to training large language models and other advanced artificial‑intelligence applications. By bypassing export licensing requirements, the alleged conduct could have bolstered Chinese AI capabilities while depriving American firms of a competitive edge.

Law enforcement officials obtained the arrest warrant after a months‑long investigation that combined digital forensics, customs records, and undercover operations. Investigators reportedly traced a series of false invoices and altered shipping manifests that listed fictitious U.S. buyers, while the actual end‑users were identified as Chinese research institutions and private firms.

Earthmade Computer, founded in 2019, positioned itself as a boutique supplier of high‑density compute clusters for data‑center clients. The company’s public statements emphasized compliance with export regulations, a claim now under scrutiny as the case proceeds through the federal court system.

Legal analysts note that the charges could carry severe penalties, including up to 20 years in prison and substantial fines, reflecting the growing emphasis on safeguarding advanced semiconductor technology from unauthorized foreign transfer. The case also arrives amid heightened tensions between Washington and Beijing over technology trade restrictions.

The Department of Commerce’s Bureau of Industry and Security said it will continue to monitor related export activities and urged companies to conduct rigorous due‑diligence checks on customers and logistics partners. The outcome of this prosecution may set a precedent for how aggressively U.S. authorities pursue violations involving AI‑related hardware.