Nvidia AI Servers Allegedly Routed Through Malaysia and Singapore In $300 Million China Scheme, California Man Charged

On Thursday, authorities arrested a California man on federal charges alleging he helped smuggle more than $300 million worth of export-controlled computer servers reportedly containing Nvidia Corp. (NASDAQ:NVDA) GPUs to China without the required licenses. California Man Faces Federal Export Charges Greg Lui, 38, also known as Yiu Kong Lui, of San Gabriel, California, faces charges of conspiring to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling and conspiracy to commit money laundering. According to the DOJ, Lui owns Earthmade Computer, a closely held technology company. The company allegedly purchased and shipped export-controlled equipment to China between 2023 and 2024 without obtaining licenses from the U.S. Department of Commerce. Prosecutors said Lui purchased 27 servers containing Nvidia H100 GPUs from an unidentified U.S. manufacturer for approximately $7.6 million under a single purchase order, The Straits Times reported. Nvidia did not immediately respond to Benzinga’s request for comment. Prosecutors allege Lui and his co-conspirators routed the equipment through countries including Malaysia and Singapore, where the shipments did not require the same U.S. export licenses, before allegedly re-exporting the technology to China. The servers contained graphics processing units, or GPUs, commonly used in artificial intelligence applications. Read Also: AI’s Trillion-Dollar Chip Boom Is Getting Bigger, and NVIDIA Isn’t the Only Winner Countries Target AI Technology Shipments to China In August, Taiwanese authorities indicted nine people, including employees of Nvidia and Super Micro Computer Inc. (NASDAQ:SMCI) over allegations of illegally exporting high-end AI servers to mainland China. The U.S. began restricting Nvidia’s advanced chip exports to China in 2022 and gradually expanded those controls. Last year, Washington required licenses for Nvidia’s H20 chip exports to China before later allowing some sales to resume. Price Action: Nvidia closed at $230.86 on Thursday and was up 0.27% to $231.49 in after-hours trading, according to Benzinga Pro. According to Benzinga Edge Rankings, Nvidia ranks in the 98th percentile for Growth, with positive short-, medium- and long-term price trends. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Read Also: SharonAI Secures $356 Million Facility to Deploy 68,000 Nvidia GPUs Photo Courtesy: Natallia Boroda on Shutterstock.com