Manila Times

Upholding Truth. Empowering the Philippines
Saturday, Jul 05, 2025

US Administration Plans to Restrict AI Chip Shipments to Malaysia and Thailand

Draft rules aim to curb semiconductor smuggling into China amid ongoing national security concerns.
The US administration is preparing to impose restrictions on the shipment of artificial intelligence (AI) chips from companies like Nvidia Corporation to Malaysia and Thailand, driven by concerns about potential semiconductor smuggling into China.

This proposed regulation stems from a draft rule being developed by the US Department of Commerce, aiming to prevent China—where sales of advanced Nvidia processors are effectively prohibited—from acquiring such chips through intermediaries in these Southeast Asian countries.

Sources familiar with the situation indicate that the proposed regulations are not yet finalized and may evolve before implementation.

The Commerce Department reportedly plans to align the new restrictions on Malaysia and Thailand with the formal repeal of existing global curbs associated with the AI diffusion rule, a framework established during President Joe Biden's administration, which faced pushback from both US allies and technology companies, including Nvidia.

The US will maintain ongoing semiconductor restrictions targeting China, initially imposed in 2022 and subsequently enhanced.

This policy also applies to over 40 other countries, with a focus on preventing smuggling and increasing oversight of critical markets.

Additionally, the proposed regulations represent an early step in the reassessment of AI export policies, as outlined by the Trump administration.

Although the new draft aims to establish a more inclusive regulatory strategy, it currently lacks comprehensive elements, such as clear security protocols regarding the use of US chips in foreign data centers, an issue of significant relevance to geopolitical dynamics, particularly in the Middle East.

There is uncertainty regarding whether the restrictions will extend to additional countries beyond Malaysia and Thailand.

The Commerce Department did not respond to requests for comment and has been vague about its regulatory intentions, apart from Secretary Howard Lutnick's recent comments to lawmakers.

He indicated that the US would permit allied nations to purchase AI chips, contingent on them being operated by approved American data center operators.

Nvidia, a leading manufacturer of AI chips, chose not to comment on the matter, while officials from the Thai and Malaysian governments did not provide responses to inquiries about these potential restrictions.

Jensen Huang, the CEO of Nvidia, has previously stated that there is "no evidence" of AI chip diversion, although his remarks did not specifically pertain to the two Southeast Asian nations in question.

In response to prior discussions about curbs due to smuggling risks, Thai officials expressed a desire for more information, while Malaysia’s Ministry of Investment, Trade and Industry emphasized the importance of clear and consistent policies for the tech sector.

Over the years, US officials have debated which countries should access American AI chips and under what conditions, balancing the global demand for Nvidia technology with concerns over potential misuse in countries like China.

Southeast Asia has become a critical area of focus as companies such as Oracle Corporation are making significant investments in data centers in Malaysia.

Recent trade data indicates a surge in chip shipments to the region.

Under pressure from US authorities, Malaysian officials have pledged to enhance scrutiny over these imports, yet the ongoing development of the Commerce Department's draft rule highlights lingering concerns.

The semiconductor market in Malaysia is also implicated in a legal case currently unfolding in Singapore, where prosecutors have charged three individuals with defrauding clients regarding the ultimate destination of AI servers—originally exported from Singapore to Malaysia—that may involve advanced Nvidia chips.

Notably, Nvidia is not being investigated in this context and has not faced any allegations of wrongdoing.

The new export restrictions would include provisions intended to ease pressures on companies operating significantly in Malaysia and Thailand.

For instance, firms based in the US and select allied nations may be allowed to ship AI chips to these countries without a license for a limited time following the rule's publication.

However, certain exemptions will remain in place to mitigate potential disruptions within the semiconductor supply chain—a sector heavily reliant on Southeast Asian facilities for crucial manufacturing processes, including chip packaging.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
US Administration Plans to Restrict AI Chip Shipments to Malaysia and Thailand
AI Raises Alarms Over Long-Term Job Security
Chinese Astronauts Successfully Return from Tiangong Space Station
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Singapore Police Empowered to Seize Bank Accounts to Combat Scams
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
AI Management Experiment Shows Promise Despite Failures
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
UK Scientists Launch Synthetic Human Genome Project with £10 Million Funding
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
North Korea to Open New Beach Resort to Boost Tourism Economy
Hong Kong Monetary Authority Intervenes as Hong Kong Dollar Reaches Weak Trading Threshold
NATO Leaders Endorse Plan for Increased Defence Spending
South Korean Court Denies Arrest Warrant for Former President Yoon Suk-yeol
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Japan’s LDP Suffers Historic Defeat in Tokyo Assembly Poll
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Philippines Vice President Sara Duterte Requests Senate to Dismiss Impeachment Case
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Vietnam to Raise Alcohol Tax to 90% by 2031 Under New Legislation
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Vietnam Confronts Rising Economic Pressures Amid Expanding U.S. Tariff Measures
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
China Releases Draft Rules on Cross-Border Automotive Data Transfers
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Rice Prices Surge in Japan Amid Supply Issues and Government Response
China-Backed Militia Oversees Rare Earth Mining Expansion in Myanmar's Shan State
UK and EU Reach Agreement on Gibraltar's Schengen Integration
Israeli Finance Minister Imposes Banking Penalties on Palestinians
Trump's Policies Prompt Decline in Chinese Student Enrollment in U.S.
×