Malaysia to Implement Trade Permits for US AI Chips

Malaysia Strengthens Controls on AI Chip Exports to the U.S.

Malaysia is increasing its involvement in assisting the United States with preventing the transfer of cutting-edge AI chips to China.

New Export Restrictions Implemented

On Monday, the Malaysian Ministry of Investment, Trade and Industry declared the implementation of new regulations concerning the export of AI chips originating from the U.S. These restrictions apply to exports originating within Malaysia.

Effective immediately, both individuals and organizations are obligated to inform Malaysian authorities a minimum of 30 days prior to exporting or transshipping U.S.-made AI chips.

Commitment to Compliance

The Ministry emphasized its dedication to preventing the circumvention of export controls and illicit trading practices. Any violations of the Strategic Trade Act 2010 or associated legislation will be met with rigorous legal consequences, according to a press release.

Rising Concerns Over Chip Smuggling

Reports of illicit smuggling of U.S. AI chips into China have surfaced repeatedly in recent months.

Elaborate Smuggling Methods

In April, Anthropic detailed the existence of well-established chip-smuggling networks operating within China in a company blog post. The post highlighted the extreme measures employed by smugglers to introduce AI chips into the country.

These methods reportedly included concealing chips within prosthetic baby bumps and shipping GPUs alongside shipments of live lobsters.

Advocacy for Stricter Regulations

Anthropic’s April publication advocated for the implementation of more stringent U.S. AI chip export regulations to combat such smuggling activities. Further restrictions are anticipated in the coming weeks.

Potential Further Restrictions from the U.S.

Bloomberg reported last week that the Trump administration is considering additional limitations on the export of AI chips, specifically from companies like Nvidia, to both Malaysia and Thailand.

The aim is to obstruct China’s access to these AI chips through alternative routes. However, no official announcement has been made by the Trump administration as of yet.

U.S. Department of Commerce Actions

Following the rescission of the Biden administration’s AI Diffusion rules in May, the U.S. Department of Commerce is also developing its own comprehensive set of AI chip export restrictions.