The Trump administration is planning to restrict companies like Nvidia from exporting AI chips to Malaysia and Thailand as part of its efforts to crack down on suspected semiconductor smuggling to China.
According to Bloomberg, sources revealed that the US Department of Commerce is drafting a rule to prevent China from obtaining these components through intermediaries in the two Southeast Asian countries. The US has already effectively banned sales of Nvidia's advanced artificial intelligence (AI) processors to China.
The sources said the rule has not been finalized and is still subject to change. Because these matters involve private conversations, the sources requested anonymity.
The sources also said officials plan to combine the controls on Thailand and Malaysia with so-called global AI proliferation measures. The AI proliferation rule is a framework proposed at the end of former President Biden’s term, which drew opposition from US allies and tech companies including Nvidia.
Washington will maintain semiconductor restrictions on China imposed in 2022 as well as measures implemented in 2023 that cover more than 40 other countries. Officials from the former Biden administration used these measures to address smuggling issues and improve transparency in key markets.
This rule would mark the first formal action by the Trump administration to fulfill its promise to reform Biden’s approach to AI proliferation, with the Department of Commerce stating in May that it would replace previous rules with its own “bold and inclusive strategy.”
However, sources indicate the draft is far from a comprehensive substitute. For example, it does not answer questions regarding the security conditions for using US chips in overseas data centers—a point of contention especially important for the Middle East. It remains unclear whether the Trump administration might eventually regulate AI chip exports to more countries beyond Malaysia and Thailand.
The US Department of Commerce did not respond to requests for comment, and government spokespeople from Thailand and Malaysia also did not respond. Nvidia also declined to comment, and CEO Jensen Huang previously stated there is “no evidence” showing AI chips being diverted, without mentioning any specific countries. (News Source: CNA)