Federal prosecutors say Lui, who also goes by Yiu Kong Lui, and unidentified co-conspirators moved the servers between 2023 and 2024. The alleged scheme involved first exporting the hardware to Malaysia and Singapore, jurisdictions where the US restrictions do not apply, before shipping it on to buyers in China, including the Chinese government. False paperwork was allegedly used to make it look as though the controlled chips were headed to permissible end users that would not need an export licence.

Lui has been charged with one count of conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, one count of outbound smuggling and one count of conspiracy to commit money laundering. If convicted on all counts, he could face up to 20 years in prison. He was arraigned and made his initial appearance on 1 October. The FBI, the Commerce Department's Bureau of Industry and Security and the Defense Criminal Investigative Service are jointly investigating.

The case is the latest in a string of prosecutions over illegal exports of restricted AI accelerators to China. Last month, nine people were indicted in Taiwan over the alleged illegal export of Nvidia B300 GPUs. Washington and its allies restrict these chips to maintain their lead in AI, but demand for Nvidia GPUs in China remains high, which reporting describes as sustaining a lively market for smuggled hardware.