Malaysia is planning to tighten regulations on semiconductors as it faces U.S. pressure to curb the flow of chips essential for artificial intelligence development to China, according to a report from the Financial Times.
Trade Minister Zafrul Aziz stated that the U.S. government is insisting that Malaysia closely monitor the movement of high-end Nvidia chips entering the country due to suspicions that many are being diverted to China.
Aziz conveyed that the U.S. has requested, "to make sure that we monitor every shipment that comes to Malaysia when it involves Nvidia chips," adding that authorities need to ensure that servers are delivered to the designated data centers and do not get redirected unexpectedly.
Nvidia has not yet responded to requests for comment.
The United States is also investigating whether DeepSeek, whose AI model gained significant attention in January, has been utilizing banned U.S. chips.
In Malaysia, there are inquiries regarding potential violations of local laws related to the shipment of servers connected to a fraud case in Singapore, as these servers may have contained advanced chips subject to U.S. export controls.
Earlier in March, Singaporean prosecutors informed a court that the case involves Singapore-based firms accused of fraudulently supplying U.S. servers to Malaysia, with transactions valued at $390 million. Reports have suggested that this case may be linked to the potential transfer of Nvidia's AI chips to the Chinese company DeepSeek.