Malaysia has not uncovered any evidence of large-scale smuggling involving artificial intelligence (AI) chips, despite rising global concerns, said Minister of Investment, Trade and Industry Tengku Zafrul Abdul Aziz.
At a press conference for the ministry’s Q2 2025 performance report, Tengku Zafrul acknowledged that demand for AI chips has risen sharply in Malaysia, driven by the country’s fast-expanding data centre sector—a trend that has triggered scrutiny from foreign regulators.
“Our team has been working closely with the Royal Malaysian Customs Department, the Malaysian Communications and Multimedia Commission (MCMC), law enforcement, and private sector stakeholders,” he said.
“We’ve also engaged with US authorities and key technology companies to ensure full cooperation. To date, we have not found any concrete evidence, but if such evidence emerges, action will be taken immediately.”
In response to mounting international pressure, the ministry this week imposed tighter export controls on high-performance AI chips of US origin. The move is part of an ongoing review to determine whether such chips should be added to the Strategic Items List under Malaysia’s Strategic Trade Act 2010.
This regulatory tightening follows reports that the US Department of Commerce plans to block China’s access to Nvidia’s most advanced AI chips by restricting indirect shipments via third countries, including Malaysia and Thailand.
Concerns were heightened in January when US authorities began probing whether Singapore had been used as a transshipment hub for restricted chips.
Malaysia became a focal point in March, after Singapore’s Home Affairs and Law Minister K. Shanmugam said that Nvidia-based servers exported to Malaysia may have been destined for another location.
Tengku Zafrul later clarified that investigations found no evidence indicating that those servers had reached the Malaysian data centre listed as the buyer.
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