Earthmade owner charged over alleged $300m server smuggling to China

U.S. prosecutors have accused Greg Lui, the owner of Earthmade Computer Inc., of helping send more than $300 million in export-controlled computer servers to China using false end-user and destination paperwork. The Justice Department announced his arrest on October 1, 2026. The allegations concern high-end servers containing U.S.-manufactured GPUs. Lui is presumed innocent unless proven guilty in court.

The indictment was returned on September 29, before the arrest; Business Insider's coverage was published on October 2. Those dates describe different stages of the story. The official releases describe alleged conduct in 2023 and 2024.

The declared end user is central to the allegation

According to the U.S. Attorney's Office for the Central District of California, Lui and alleged co-conspirators used Earthmade to purchase controlled servers and ship them through countries including Malaysia and Singapore before sending them to China. Prosecutors say documentation supplied to U.S. manufacturers misrepresented the ultimate users and destinations.

The three counts are conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering. A charge records the government's accusation; it does not establish that the alleged acts have been proved.

For technology suppliers, the reported issue is the relationship between the stated transaction and the eventual recipient. TechKili has not independently verified the shipments. Both official announcements describe the same prosecution.

Server value does not identify a chip model

The Justice Department's more-than-$300-million figure applies to export-controlled servers. It is not presented as a retail valuation of individual chips. Neither official release reviewed for this article identifies the GPU manufacturer or model, so they do not establish a particular accelerator's quantity, performance or contribution to a computing cluster.

That limit matters when interpreting an AI hardware case. A headline value cannot be converted into a count of processors or a training-capacity estimate without a documented inventory and configuration. The evidence here supports reporting the alleged server trade and the charges, while leaving those technical details unresolved.

Export checks extend beyond the first destination

The Bureau of Industry and Security's current end-user and end-use guidance explains that licensing considerations can depend on the parties and intended use, including circumstances in which an item's classification and destination alone would not trigger a requirement. Its Export Compliance Toolkit recommends customer and red-flag guidance as part of a compliance program.

For a hardware business, the practical response is to route inconsistencies about the customer, end use or ultimate destination to the people responsible for export compliance. A shipment's first stop is only one part of that review. The rules applicable to a particular transaction still need to be assessed against its specific facts and the relevant regulations.

Sources

• U.S. Department of Justice: October 1 arrest announcement

• Central District of California: October 1 charges announcement

• BIS: end-user and end-use guidance

• BIS: Export Compliance Toolkit

• Business Insider: October 2 coverage