Malaysia is to require permits for exports of high-performance US artificial intelligence (AI) chips, suggesting the government is seeking to clamp down on potential diversion of the sensitive components to places such as China.
Effective immediately, people and companies must notify Kuala Lumpur at least 30 days prior to exporting or shipping such hardware, the Malaysian Ministry of International Trade and Industry said yesterday.
They must inform the agency if they know or “have reasonable grounds” to suspect the items would be misused or used for restricted activities, it said.
Photo: Reuters
Malaysia “will not tolerate the misuse of Malaysia’s jurisdiction for illicit trading activities,” it said.
Kuala Lumpur has come under increasing pressure from Washington — which has effectively banned the sale of advanced AI chips to China since 2022 — to halt the suspected flow of those parts to China via intermediaries in Malaysia.
Malaysian authorities in March said that they would tighten regulations on the country’s burgeoning data center industry, which relies on chips from the likes of Nvidia Corp.
The new permit requirements aim to “close regulatory gaps,” while Malaysia “undertakes further review” of the potential inclusion of AI chips to a national list of items covered by the Strategic Trade Act, the ministry said.
Semiconductor sales to Malaysia are also a focal point of a court case in Singapore, where prosecutors charged three men with defrauding customers about the ultimate destination of AI servers — originally shipped from Singapore to Malaysia — that might have contained advanced Nvidia chips.
Malaysia in March said that its investigation into the matter had not uncovered evidence of such shipments, and that the country would continue to monitor for possible fraud.
Nvidia has not been accused of any wrongdoing in Singapore’s investigation.
Malaysia is a key part of the AI supply chain, home to many facilities used for developing and deploying AI models. US companies, including Oracle Corp, are massively expanding their data center footprints in the country, which saw an increase in imports of crucial components this year.
Nvidia CEO Jensen Huang (黃仁勳) has said there was “no evidence” of AI chip diversion, in general remarks that did not touch on any particular country.
Regarding potential US curbs, Malaysian Minister of Investment, Trade and Industry Tengku Zafrul Aziz said it welcomes dialogue with the US and other nations to “clarify any misunderstandings,” while also warning that unilateral restrictions could disrupt legitimate trade and hamper innovation.
The ministry — which, like many others in Asia, is hammering out a trade deal with US officials — added that “all matters related to Malaysia-US bilateral trade are interlinked, each having its own unique role in the current trade negotiations.”
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