The United States is reportedly planning to impose new restrictions on the export of advanced AI chips to Malaysia and Thailand. The move comes as Washington grows concerned that Chinese companies are using these Southeast Asian countries to bypass existing US bans on direct exports to China, reports Bloomberg. Under the proposed rules, American chipmakers like Nvidia would need a special license to send high-end processors to Malaysia and Thailand.
The draft rules are currently being reviewed by the US Commerce Department. If implemented, it would be the first time the US places such export controls on Southeast Asian countries. The move is part of a broader strategy to prevent China from gaining access to advanced computing power, which is essential for training large artificial intelligence models. The Biden administration had earlier introduced a wider set of restrictions that applied to over 150 countries, but the current administration is shifting toward more targeted measures that focus on specific countries where diversion risks are high.
Malaysia and Thailand have come under closer scrutiny in recent months. Especially, Malaysia is a major global hub for semiconductor assembly and testing. In 2024, Malaysia exported about $37 billion worth of semiconductors, with over a third of those shipments going to China and Hong Kong. Thailand also saw a sharp increase in its chip exports to China, totaling around $815 million.
This potential development comes after recent reports revealed that a group of Chinese engineers travelled to Kuala Lumpur (Malaysia) with suitcases full of hard drives containing AI training data. They rented over 300 Nvidia-powered servers in a Malaysian data center to train models, then returned to China with the results. As per reports, investigations found they operated through Singapore-registered firms before setting up a company in Malaysia to hide their activities.
And now, in response, the proposed rules would require licenses for the export of powerful AI chips to Malaysia and Thailand, even if the buyers are not directly linked to China. The US government also plans to increase oversight of exports and enforce stricter checks on shipments that may be at risk of being diverted to Chinese entities.
However, to avoid disrupting global supply chains, the rules are expected to include some exemptions. For example, companies involved in semiconductor packaging and testing (common in Malaysia and Thailand) may be allowed to continue operations without needing a license for a limited period. The rule is still under internal review and may be adjusted before it is officially implemented. Malaysia and Thailand have not yet responded officially to the draft rules.
