Chinese State-Backed Lender Finances Purchase of Restricted Nvidia Chips

A Chinese financing company controlled largely by local governments, Semi-Tech Leasing Group Co., has reportedly financed the purchase of Nvidia chips that fall under U.S. export restrictions, according to a Bloomberg report.

The hardware in question is Nvidia’s Blackwell-series B300 chips, which are integral to advanced computing applications. The financing enabled Glory View Technology Co. to acquire over 700 servers, including a contract for 32 Asustek servers equipped with these restricted chips.

Semi-Tech’s funding was facilitated through sale-and-leaseback arrangements, allowing Glory View to raise more than 3 billion yuan (approximately $450 million) to enhance its AI infrastructure.

Background on Semi-Tech

Semi-Tech is primarily controlled by municipal governments in Shenzhen and Beijing and is linked to China’s national semiconductor fund, which aims to bolster domestic chip production capabilities. The company has invested over 11 billion yuan (about $1.6 billion) into computing infrastructure, with significant funds directed towards a major data center hub operated by China Mobile in Ningxia.

Implications for U.S. Export Controls

The case of Semi-Tech highlights the challenges U.S. regulators face in enforcing export controls on advanced AI chips. While the regulations are designed to prevent the most powerful hardware from reaching Chinese buyers, the financing structure employed by Semi-Tech complicates enforcement efforts. This situation may prompt regulators to scrutinize financial transactions alongside shipping manifests.

For Beijing, this financing strategy aligns with broader objectives to advance its technological capabilities, particularly in AI and computing.

New Developments in Nvidia Chip Smuggling Case

On October 1, 2026, Greg Lui, a 38-year-old California business owner, was arrested for allegedly smuggling over $300 million worth of export-controlled AI hardware to China. His company, Earthmade Computer Inc., is at the center of this case, which is part of a broader U.S. effort to prevent advanced computing technology from reaching China.

Lui faces three charges: conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering. The indictment claims that between 2023 and 2024, Lui shipped high-end computer servers containing U.S.-manufactured GPUs to China without the required export license, routing shipments through Malaysia and Singapore with falsified documentation.

One notable transaction involved an order for 27 Nvidia H100 GPU servers valued at approximately $7.6 million in January 2024. Earthmade Computer Inc. reportedly received over $176 million from two Malaysia-based shipping companies during the first ten months of 2024.

If convicted, Lui could face up to 20 years in prison for conspiracy and money laundering charges, and up to 10 years for the smuggling charge. This case highlights the increasing scrutiny faced by chipmakers and their supply chains regarding export-controlled hardware.

New Developments

• US officials are questioning Nvidia's oversight after restricted AI chips continue to reach China, raising concerns about the company's monitoring capabilities.
• A Bloomberg investigation published on October 1, 2026, highlighted red flags that Nvidia's oversight mechanisms failed to catch, including surveillance imagery of labels being stripped off servers.
• On the same day as the Bloomberg report, Greg Lui was arrested on charges of conspiracy, smuggling, and money laundering for allegedly trafficking over $300 million in Nvidia AI chip-equipped servers to China between 2023 and 2024.
• In March 2026, three individuals linked to Super Micro Computer were indicted for an alleged scheme to falsely route approximately $510 million in Nvidia-loaded servers to China, bringing the total alleged diversions to over $800 million.
• A September 2026 report from C4ADS identified smuggling routes through Southeast Asia, particularly Malaysia and Vietnam, as part of a shadow trade in Nvidia products.
• Senators Jim Banks and Elizabeth Warren have urged a review of Nvidia's export licenses, citing inadequate monitoring by the company.
• The current export restrictions trace back to 2022, aimed at slowing China's military and technological advancements, specifically targeting high-performance GPUs, including Nvidia's H100 and H200 chips.
• A formal review of export licenses could potentially limit Nvidia's sales of advanced products, increasing scrutiny on Southeast Asian transit routes.