US plans AI chip curbs on Malaysia, Thailand over China concerns

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The US wants to prevent China from obtaining AI chips through intermediaries in the two South-east Asian nations.

PHOTO: REUTERS

Summary

• The US plans to restrict AI chip shipments from companies like Nvidia to Malaysia and Thailand to prevent semiconductor smuggling into China.
• The Commerce Department aims to replace Bidens AI diffusion rule with a new strategy, but details on data centre security remain unclear.
• Despite potential exemptions for US firms, the rule reflects concerns about chip diversions and Chinese access to data centres in Southeast Asia.

AI generated

WASHINGTON – President Donald Trump’s administration plans to restrict shipments of AI chips from the likes of Nvidia to Malaysia and Thailand, as part of an effort to crack down on suspected semiconductor smuggling into China.

A draft rule from the Commerce Department seeks to prevent China – to which the US has effectively

banned sales of Nvidia’s advanced AI processors

The rule is not yet finalised and could still change, said the people, who requested anonymity to discuss private conversations.

Officials plan to pair the Malaysia and Thailand controls with a formal rescission of global curbs from the so-called AI diffusion rule, the people said.

That framework from the end of president Joe Biden’s term drew objections from US allies and tech companies, including Nvidia.

Washington would maintain semiconductor restrictions targeting China – imposed in 2022 and ramped up several times since – as well