The US administration under President Donald Trump is preparing new restrictions on the export of advanced AI chips to Malaysia and Thailand, Bloomberg reportedly citing sources familiar with the issue. The move is part of a broader effort to prevent sensitive technologies, particularly Nvidia's cutting-edge processors from being re-routed to China through third countries.
Draft rules formulated by the Ministry of Commerce are still under review and may be subject to change before implementation. However, it is expected that officials will formally withdraw President Joe Biden's previous “AI Proliferation” rules and replace them with a new strategy targeting potential smuggling routes in Southeast Asia.
Concerns about access to Chinese AI chips
US authorities have argued that despite direct restrictions on the sale of NVIDIA's AI chips to China, certain Chinese entities may be accessing these processors through servers and intermediaries based in Malaysia and Thailand. In June, Malaysia announced it was confirming reports that Chinese companies operating within the country were using servers equipped with NVIDIA to train large language models.
Commerce Department officials are particularly wary of third-party data centers that provide remote access to China-based AI developers. Biden-era regulations sought to curb more than 40 countries and increase control of the global flow of American AI technology. The Trump administration is trying to maintain these core restrictions, but has restructured how they are applied and focused more on enforcement and export channels.
Nvidia, the dominant global supplier of AI chips, declined to comment on reported draft rules. CEO Jensen Huang has previously said there was “no evidence” of a chip conversion, but he did not refer to any particular country. Meanwhile, Malaysia's Ministry of Investment is seeking “clear and consistent” policy guidance, but officials from the Malaysian and Thai governments have not responded publicly.
Southeast Asia plays a key role in the global chip supply chain, particularly packaging and assembly. Companies such as Oracle have invested heavily in local data centers. The proposed rules may include transitional provisions that allow us and our allies to continue operations in Malaysia and Thailand without immediate licensing burden.
Smuggling concerns cause legal cases
Washington's fears have been reflected in an ongoing legal lawsuit in Singapore, with prosecutors accusing three men of misleading customers about the final destination of AI servers shipped from Singapore to Malaysia. These servers reportedly included advanced Nvidia chips, but Nvidia has not been accused of fraud.
The Trump administration's move represents the first major effort to restructure AI management during the Biden era, indicating that further expansion to other countries is possible.
