Malaysia plans to implement stricter regulations on semiconductor shipments following pressure from the United States to prevent high-end chips from reaching China, according to a report by the Financial Times.
Trade Minister Zafrul Aziz confirmed that the U.S. government is urging Malaysia to enhance monitoring of Nvidia (NVDA.O) chips amid concerns that they may be diverted to China. “They want us to ensure servers end up in their intended data centers and not get redirected,” Aziz stated.
The scrutiny comes as the U.S. investigates whether banned chips were used by Chinese AI firm DeepSeek, whose AI model made headlines in January for its impressive performance.
Malaysia has also launched its own probe into whether local laws were violated during the shipment of servers potentially containing restricted Nvidia chips. This investigation follows a Singapore fraud case involving $390 million worth of transactions, where Singapore-based companies are accused of unlawfully supplying U.S. servers to Malaysia.
While Nvidia has not commented, the tightening regulations reflect growing geopolitical tensions over AI technology and semiconductor exports.
