Malaysia imposes new curbs on AI chip exports as US targets China smuggling

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The measures, which are effective immediately, will require individuals and firms to notify Kuala Lumpur at least 30 days before exporting or shipping such hardware.

PHOTO: REUTERS

Malaysia will now 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 like China.

Effective immediately, individuals and companies must notify Kuala Lumpur at least 30 days prior to exporting or shipping such hardware, Malaysia’s trade and industry ministry said on July 14.

They must inform the agency if they know or “have reasonable grounds” to suspect the items will be misused or used for restricted activities.

Malaysia “will not tolerate the misuse of Malaysia’s jurisdiction for illicit trading activities,” the ministry said.

Kuala Lumpur has come under increasing pressure from Washington – which has effectively

banned the sale of advanced AI chips to China since 2022

Malaysian authorities said in March that they would tighten regulations on the country’s burgeoning data centre industry, which relies on chips from the likes of Nvidia.

The new permit requirements aim to “close regulatory gaps,” according to the ministry’s statement, 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 did not immediately respond to questions about whether the controls came at Washington’s urging.

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