(Singapore, 6th) Sources revealed that the US government plans to restrict US tech giants like NVIDIA from exporting artificial intelligence chips to Malaysia and Thailand, in order to prevent China from accessing these technologies and products through the two countries.
This move could hinder Malaysia’s goal of developing itself into a regional data center hub. Associate Professor of Economics at Universiti Tunku Abdul Rahman, Dr. Wong Kim Weng, said in an interview that if the Trump administration completely restricts the export of advanced chips to Malaysia, the impact would be even greater than the AI proliferation rules issued during former President Biden’s administration.
He said, the AI proliferation rules merely limited the export volume, not completely banning AI chip exports to Malaysia. “If the US were to fully restrict exports, the hit to Malaysia would be devastating. Also, if only a small quota of computing power exports were allowed, it wouldn't match the scale needed for large enterprises investing in Malaysia, such as Oracle.”
However, he said that at present, these reports seem more like trial balloons released ahead of negotiations between the US and Malaysia/Thailand. “Just like previously, when China lifted export restrictions on rare earths, the US, in return, lifted restrictions on chip design software exports to China.”
He believes another possibility is the US using new export restrictions to force Malaysia to pick a side. “Previously, the US also imposed restrictions on Qatar, but later granted exemptions on the condition that Qatar, if purchasing US chips, would not use Huawei chips or technology.”
Currently, the second 5G network operator in Malaysia, U Mobile, is partnered with Huawei. Dr. Wong Kim Weng said the US might raise similar requirements for Malaysia as it did for Qatar, asking Malaysia to pick a side between the US and China in the tech sector.
Malaysia’s Deputy Minister of Investment, Trade and Industry, Liew Chin Tong, when asked, said the current information is only media rumors; he will not comment for now.
Bloomberg quoted informed sources as saying that the US Department of Commerce is drafting a rule to synchronize AI chip export control measures for Malaysia and Thailand with the global semiconductor export controls, to be implemented after the AI proliferation rule is revoked.
The AI proliferation rule, enacted near the end of Biden’s term, faced opposition from US allies and tech companies like NVIDIA. After Trump took office, the US Department of Commerce stated in May this year that it would be replaced with a “bold and inclusive” strategy.
The new measures are aimed at restricting AI chips and technologies from being exported, keeping advanced computing power within the US and its allies, and expanding efforts to deny China access to these technologies. In fact, the US has already banned the sale of NVIDIA's advanced AI processors to China, and the new rules are intended to prevent China from obtaining those components via Malaysia and Thailand as intermediaries.
Sources said that export restrictions targeting Malaysia and Thailand will include some buffer measures to ease the pressure on companies with large-scale operations in these two countries. One such measure would allow companies headquartered in the US and dozens of friendly countries to continue exporting AI chips to these Southeast Asian countries for several months after the new regulations are issued, without requiring an export license.
Since many semiconductor companies rely on Southeast Asian facilities for critical manufacturing stages like packaging, there will still be specific exemptions under particular conditions, even if license applications are required, to prevent supply chain disruptions.
However, sources say these rules have not been finalized and could still change. It is also unclear whether the Trump administration will eventually extend AI chip export controls to more countries.
The US Department of Commerce did not respond to Bloomberg’s request for comment. The Thai government spokesperson also did not respond, and NVIDIA declined to comment.
NVIDIA CEO Jensen Huang said in May this year that there are no signs that the company’s high-end chips are being re-exported to China, and expressed confidence in NVIDIA’s trading partners.
Previously, some media reported that a China-based company operating in Malaysia was using servers equipped with NVIDIA chips and other AI hardware to train large language models. The Malaysian government is currently verifying the matter.
This move could hinder Malaysia’s goal of developing itself into a regional data center hub. Associate Professor of Economics at Universiti Tunku Abdul Rahman, Dr. Wong Kim Weng, said in an interview that if the Trump administration completely restricts the export of advanced chips to Malaysia, the impact would be even greater than the AI proliferation rules issued during former President Biden’s administration.
He said, the AI proliferation rules merely limited the export volume, not completely banning AI chip exports to Malaysia. “If the US were to fully restrict exports, the hit to Malaysia would be devastating. Also, if only a small quota of computing power exports were allowed, it wouldn't match the scale needed for large enterprises investing in Malaysia, such as Oracle.”
However, he said that at present, these reports seem more like trial balloons released ahead of negotiations between the US and Malaysia/Thailand. “Just like previously, when China lifted export restrictions on rare earths, the US, in return, lifted restrictions on chip design software exports to China.”
He believes another possibility is the US using new export restrictions to force Malaysia to pick a side. “Previously, the US also imposed restrictions on Qatar, but later granted exemptions on the condition that Qatar, if purchasing US chips, would not use Huawei chips or technology.”
Currently, the second 5G network operator in Malaysia, U Mobile, is partnered with Huawei. Dr. Wong Kim Weng said the US might raise similar requirements for Malaysia as it did for Qatar, asking Malaysia to pick a side between the US and China in the tech sector.
Malaysia’s Deputy Minister of Investment, Trade and Industry, Liew Chin Tong, when asked, said the current information is only media rumors; he will not comment for now.
Bloomberg quoted informed sources as saying that the US Department of Commerce is drafting a rule to synchronize AI chip export control measures for Malaysia and Thailand with the global semiconductor export controls, to be implemented after the AI proliferation rule is revoked.
The AI proliferation rule, enacted near the end of Biden’s term, faced opposition from US allies and tech companies like NVIDIA. After Trump took office, the US Department of Commerce stated in May this year that it would be replaced with a “bold and inclusive” strategy.
The new measures are aimed at restricting AI chips and technologies from being exported, keeping advanced computing power within the US and its allies, and expanding efforts to deny China access to these technologies. In fact, the US has already banned the sale of NVIDIA's advanced AI processors to China, and the new rules are intended to prevent China from obtaining those components via Malaysia and Thailand as intermediaries.
Sources said that export restrictions targeting Malaysia and Thailand will include some buffer measures to ease the pressure on companies with large-scale operations in these two countries. One such measure would allow companies headquartered in the US and dozens of friendly countries to continue exporting AI chips to these Southeast Asian countries for several months after the new regulations are issued, without requiring an export license.
Since many semiconductor companies rely on Southeast Asian facilities for critical manufacturing stages like packaging, there will still be specific exemptions under particular conditions, even if license applications are required, to prevent supply chain disruptions.
However, sources say these rules have not been finalized and could still change. It is also unclear whether the Trump administration will eventually extend AI chip export controls to more countries.
The US Department of Commerce did not respond to Bloomberg’s request for comment. The Thai government spokesperson also did not respond, and NVIDIA declined to comment.
NVIDIA CEO Jensen Huang said in May this year that there are no signs that the company’s high-end chips are being re-exported to China, and expressed confidence in NVIDIA’s trading partners.
Previously, some media reported that a China-based company operating in Malaysia was using servers equipped with NVIDIA chips and other AI hardware to train large language models. The Malaysian government is currently verifying the matter.