Malaysia is implementing controls on chip exports amid US efforts to stop smuggling of advanced semiconductors.
Malaysia has moved to require permits for exports of high-performance US artificial intelligence chips, effective immediately, in an effort to prevent diversion to China. Companies and individuals must notify the Malaysian Ministry of International Trade and Industry at least 30 days prior to exporting such hardware and must inform the agency if they know or "have reasonable grounds" to suspect the items would be misused or used for restricted activities. The government stated that it "will not tolerate the misuse of Malaysia's jurisdiction for illicit trading activities." 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.
Malaysia has faced increasing pressure from Washington, which has effectively banned the sale of advanced AI chips to China since 2022, to halt the suspected flow of sensitive components to China via intermediaries. In March, Malaysian authorities said they would tighten regulations on the country's burgeoning data center industry, which relies on chips from companies such as Nvidia Corp. Malaysia is a key part of the AI supply chain, home to many facilities used for developing and deploying AI models, with US companies including Oracle Corp massively expanding their data center footprints in the country. A Singapore court case involving three men charged with defrauding customers about the ultimate destination of AI servers—originally shipped from Singapore to Malaysia—that might have contained advanced Nvidia chips has highlighted regional concerns. Malaysia said in March that its investigation 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 the investigation.
Malaysian Minister of Investment, Trade and Industry Tengku Zafrul Aziz has said the country welcomes dialogue with the US and other nations to "clarify any misunderstandings," while warning that unilateral restrictions could disrupt legitimate trade and hamper innovation. Nvidia CEO Jensen Huang has stated there was "no evidence" of AI chip diversion in general remarks that did not address any particular country.
Google DeepMind vice president John Jumper, who won the 2024 Nobel Prize in chemistry for his work on artificial intelligence, is leaving the company to join Anthropic PBC. Jumper has been a key member of Google's AI coding development team, and his departure strains the tech giant's efforts to beat Anthropic, OpenAI and SpaceX in the race to build the most powerful AI models. Google has struggled to sell AI coding tools to businesses, according to former employees.
US Secretary of Commerce Howard Lutnick has expressed concerns to Dutch chip-equipment giant ASML Holding NV's senior leaders that one of its top-of-the-line machines might have made its way into China in violation of US-led export restrictions. Lutnick raised concerns over ASML's extreme ultraviolet lithography (EUV) machines, which are used by firms such as Taiwan Semiconductor Manufacturing Co to manufacture processors for companies like Nvidia Corp and Apple Inc. ASML has never been allowed to ship EUV systems to China because of export curbs, and the company has denied "unfounded rumors regarding non-compliance with export controls concerning China," stating that it enforces controls strictly.