00:00Federal prosecutors say more than $300 million of export-controlled servers were routed to China.
00:07The bigger story is the supply chain behind them.
00:11According to the Justice Department, EarthMade Computer, Inc., is a city of industry technology company.
00:18Prosecutors charged its owner, Greg Lewy, and allege it was used to rout export-controlled servers.
00:24The indictment alleges that from 2023 through 2024, the servers went to Malaysia and Singapore, where no license was required,
00:35then onward to China.
00:36Prosecutors say EarthMade received more than $176 million from two Malaysia-based shippers,
00:42and that one order covered 27 servers worth about $7.6 million, shipped from Lowe's Angels to Kuala Lumpur.
00:51The Justice Department does not name the manufacturer.
00:55Advanced GPU systems do not necessarily move directly from the chip designer to the final user.
01:01There is a server builder, a reseller, a freight company, an overseas consignee, then an end user.
01:08Each handoff is where the stated destination and the real one can come apart.
01:13Export Control Guidance asks exporters to establish who the real purchaser is,
01:19who the ultimate consignee and end user are, and where the hardware will actually be installed.
01:25AI infrastructure is usually discussed in terms of chips and data centers.
01:30This case points at another layer, who moves the hardware and where it ends up.
01:35These are allegations, and the defendant is presumed innocent.
01:39Also, I want you to bring in front of a one-way to the end user's cover.
