Malaysia to Mandate Trade Permits for U.S. AI Chips

Malaysia is intensifying its initiatives to support the U.S. in curbing the flow of advanced AI chips to China.

On Monday, the Malaysian Ministry of Investment, Trade and Industry unveiled new regulations regarding the export of U.S.-origin AI chips. Individuals and corporations must now notify Malaysian authorities at least 30 days before exporting or transshipping these chips, effective immediately.

“Malaysia stands firm against any attempts to circumvent export controls or engage in unlawful trade activities. Individuals or entities found violating the STA 2010 or associated regulations will face strict legal repercussions,” the Ministry stated in a press release.

In recent months, there have been numerous allegations of U.S. AI chips being illicitly transported into China.

In an April blog post, Anthropic claimed that China has already developed sophisticated networks for smuggling chips. The post emphasized that traffickers were employing extreme methods to transport AI chips into China, including using prosthetic baby bumps filled with chips and shipping GPUs alongside live lobsters.

Anthropic’s April post called for the U.S. to enforce more stringent export regulations on AI chips to address this smuggling issue. Such measures are anticipated to be announced shortly.

Last week, Bloomberg reported that the Trump administration is planning to impose additional restrictions on AI chip exports from companies like Nvidia to Malaysia and Thailand to prevent China from accessing these chips through alternative pathways. No official announcement concerning this has been made yet.

Moreover, the U.S. Department of Commerce is crafting its own general export restrictions for U.S. AI chips, having formally repealed the Biden administration’s AI Diffusion rules in May.