Greg Lui Arrested for Allegedly Smuggling $300M in AI Chips to China

Federal agents arrested a 38-year-old California tech executive outside his own company headquarters after prosecutors charged him with smuggling more than $300 million in export-controlled American servers and artificial intelligence chips to China.

Greg Lui, founder of EarthMade in San Gabriel, was taken into custody as surveillance footage captured the operation unfolding in real time.

The arrest followed a federal indictment accusing Lui of orchestrating a complex scheme to export high-performance computing hardware to China in direct violation of national security regulations. Agents surrounded Lui outside the EarthMade facility, placed him in handcuffs, and proceeded to search his white Tesla Cybertruck before executing a warrant at his residence.

A 38-year-old tech executive was arrested outside his California company, accused by federal prosecutors of helping smuggle more than $300 million in export-controlled computer servers to China. Video shows agents taking Greg Lui into custody in San Gabriel and searching his… pic.twitter.com/iVyOyh1a0l

— Breaking911 (@Breaking911) October 2, 2026

Prosecutors allege that Lui and co-conspirators used EarthMade as a front to purchase advanced U.S.-made servers and processors, including components manufactured by NVIDIA, which are subject to strict export controls designed to prevent adversaries from obtaining cutting-edge technology. The indictment details how the hardware was routed through Singapore and Malaysia to disguise the final destination before being forwarded to China.

In one documented transaction, federal investigators traced 92 servers loaded onto a Singapore Airlines flight departing San Francisco International Airport bound for Malaysia. From there, the cargo continued to Hong Kong, evading restrictions meant to block such transfers. The operation allegedly ran for an extended period, moving hundreds of millions of dollars in controlled technology through third-country layovers designed to obscure the trail.

The charges filed against Lui include conspiracy to violate the Export Control Reform Act, smuggling, and money laundering. Each count carries significant prison time if convicted. Federal prosecutors emphasized in court filings that Lui conducted the operation with full knowledge that exporting such high-end technology to China is prohibited under regulations established to protect American national security and foreign policy interests.

The hardware at the center of the case represents some of the most powerful artificial intelligence processing equipment available. These servers and chips are capable of accelerating machine learning applications, military research, and surveillance systems. U.S. export controls specifically target this category of technology because of its dual-use potential in both commercial and defense applications.

By allegedly exploiting legitimate business channels and established trade routes through Southeast Asia, the smuggling operation attempted to bypass safeguards put in place to maintain America’s technological advantage over strategic competitors. The indictment portrays a calculated effort to mask the true buyer and final destination of sensitive equipment that federal law explicitly bars from Chinese hands.

The enforcement action highlights an ongoing vulnerability in the global supply chain. Transshipment schemes that route controlled goods through intermediate countries remain a persistent challenge for customs and export enforcement agencies. This case illustrates how a domestic company with lawful access to restricted technology can be weaponized to serve foreign interests when executives prioritize profit over legal compliance and national security.

Federal agents coordinated the arrest with searches of both the vehicle and Lui’s home, recovering evidence that prosecutors will use to build their case. The video footage of the arrest provides a rare public window into how federal authorities execute operations targeting export control violations. The images show the scale and coordination involved when multiple agencies move against a suspect accused of compromising national security.

The case now advances through federal court, where Lui will face trial on three felony counts. If the evidence supports the allegations, the conviction could result in years of imprisonment and substantial financial penalties. The outcome will send a message about the consequences of enabling adversaries to obtain technology that Congress and the executive branch have determined must remain out of hostile hands.

The arrest serves as a warning to other executives and businesses that access to controlled technology carries legal responsibilities. Companies that manufacture, distribute, or export advanced hardware are obligated to comply with federal regulations governing where that equipment can go and who can possess it. Violations are not treated as paperwork errors or regulatory oversights—they are prosecuted as serious crimes threatening the security of the republic.

This case underscores the direct link between corporate conduct and national defense. When American-made servers and chips designed for artificial intelligence reach China through illegal channels, they provide a strategic adversary with tools that can be turned against U.S. interests. The technology involved is not theoretical—it is operational hardware with immediate applications in military and intelligence systems that could be used to track, target, or outmaneuver American forces and allies.

The arrest of Greg Lui marks another chapter in the federal government’s broader effort to protect export-controlled technology from diversion. As competition with China intensifies across economic, technological, and military domains, enforcement of export regulations becomes a frontline defense. This prosecution demonstrates that individuals who choose to serve foreign interests by smuggling sensitive equipment will be identified, arrested, and held accountable.