Catenaa, Monday, June 23, 2025- Malaysia is investigating claims that Chinese firms are using the country to bypass US export controls on advanced Nvidia chips, following reports that engineers transported sensitive AI data to local data centers earlier this year.
The Wall Street Journal reported Chinese engineers traveled to Malaysia in March carrying hard drives to build artificial intelligence models using high-end Nvidia chips.
The models were reportedly intended for transfer back to China, raising red flags amid tightened export restrictions on advanced semiconductors.
Malaysia’s Ministry of Investment, Trade and Industry confirmed Wednesday it is verifying the allegations with relevant agencies.
While servers with AI chips are not classified as controlled items under Malaysian law, the ministry said it would act firmly against any company violating domestic or international trade rules.
“Malaysia will cooperate with any government requiring assistance in monitoring sensitive goods,” the ministry said, stressing that circumventing export controls is illegal under local regulations.
Beijing responded by insisting Chinese firms must follow local laws but criticized efforts to restrict international trade cooperation.
Foreign ministry spokesperson Guo Jiakun said China remains committed to a free and open global trade system.
In a related development, Singapore charged three men in March over alleged involvement in fraud linked to Nvidia chip transfers, with media reports tying the case to Chinese AI firm DeepSeek.
DeepSeek, which released its R1 chatbot in January, has been under global scrutiny for producing low-cost AI models rivaling leading technologies.
