Malaysia will require trade permits for U.S. AI chips

Malaysia is taking on a bigger role in helping the U.S. prevent advanced AI chips from ending up in China.

The Malaysian Ministry of Investment, Trade and Industry announced new restrictions on exporting AI chips of U.S. origin out of its country on Monday. Individuals and companies are now required to notify Malaysian authorities at least 30 days in advance when they are exporting or transshipping U.S. AI chips, effective immediately.

“Malaysia stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual or company, who will face strict legal action if found violating the STA 2010 or related laws,” the Ministry wrote in a press release.

Alleged chip smuggling of U.S. AI chips into China has come up multiple times in recent months.

Anthropic claimed that China already had sophisticated chip-smuggling networks set up in a blog post in April. The post also claimed that smugglers were going to extreme lengths to bring AI chips into China, including using prosthetic baby bumps filled with chips, and that smugglers were shipping GPUs alongside live lobsters.

Anthropic’s April blog post was written in favor of the U.S. imposing more AI chip export rules to prevent this type of smuggling. Those restrictions are likely arriving in the near future.

Last week, Bloomberg reported that the Trump administration was planning to further restrict the export of AI chips, from companies like Nvidia, to Malaysia and Thailand, to prevent China from accessing these AI chips through a different mode of entry. The Trump administration has not made an official announcement regarding this yet.

The U.S. Department of Commerce is also working on its own set of general U.S. AI chip export restrictions after formally rescinding the Biden administration’s AI Diffusion rules in May.