The US has arrested another suspect accused of smuggling high-end computer servers containing export-controlled Nvidia chips into China.

In a press release on Thursday, the Department of Justice accused 38-year-old Greg Lui of using false paperwork to mask shipments of servers worth more than $300 million that he allegedly knew were ultimately destined for China.

As the CEO of Earthmade Computer, Lui allegedly conspired with freight-forwarding firms in South Asian countries like Malaysia and Singapore to illegally divert chip shipments into China, including Nvidia’s A100 GPUs and H100 GPUs, the FBI’s indictment alleged. These are not Nvidia’s most advanced chips. However, the chips can process large amounts of data and train large language models, which the US fears could pose national security risks if China suddenly gets access to enough chips to drastically advance its AI or strengthen its military.

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On its face, the recent summit between Donald Trump and China’s president, Xi Jinping, didn’t change much in the world of AI regulation. Export controls were not discussed, with neither country seemingly interested in making concessions. An already tenuous trade truce was temporarily extended for just two months, and looming US controls that could drop soon could easily end that and trigger China to retaliate by cutting off exports of rare earths, analysts expect.

However, in the background of these shaky talks, Nvidia appeared to notch a big win, as China is currently mulling relaxing controls and allowing some of its biggest AI firms to import perhaps millions more of Nvidia’s banned chips over the next year.

Sources familiar with China’s talks told The Information that China’s tech oversight arm, the Ministry of Industry and Information Technology, asked Alibaba and ByteDance to share plans to buy Nvidia’s RTX Pro 5500 chips. Although these are gaming chips, China asked firms to detail how they plan to use them, with expectations that chips could be put into servers to help power the country’s most in-demand AI models.

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