No Evidence of Chip Smuggling Detected So Far

No Evidence of Chip Smuggling Detected So Far – MITI

Allegations of artificial intelligence (AI) chip smuggling have not been proven so far, according to the Minister of Investment, Trade and Industry (MITI), Tengku Datuk Seri Zafrul Tengku Abdul Aziz.Earlier, MITI confirmed that an investigation is underway into a report involving a China-based company operating in Malaysia. The company was reported to be using servers equipped with NVIDIA chips for AI development purposes, raising concerns about the potential misuse of the technology.Further investigations are being carried out through collaboration between MITI and enforcement agencies such as the Royal Malaysian Police, Royal Malaysian Customs Department and the Malaysian Communications and Multimedia Commission (MCMC). Engagements have also been held with the US government and major technology companies to strengthen cooperation in addressing this issue.The surge in demand for AI chips in Malaysia has been identified as a cause for global concern. The rapid development of the data center sector has positioned Malaysia as a major player in the regional technology landscape, drawing international attention to the potential for illegal transfers of high-tech chips.Following this, on July 14, MITI took proactive action by imposing immediate export controls on the movement of high-performance AI chips from the United States. This measure was taken under the provisions of ‘Catch-All Control’ in line with Section 12 of the Strategic Trade Act 2010 (STA 2010).The picture is for illustration purposes onlyTengku Zafrul stressed that the controls are aimed at preventing misuse of technology and ensuring that Malaysia remains compliant with international standards. The listing of AI chips in the Strategic Items List (SIL) is currently being reviewed to impose stricter regulations.He also stated that the government is committed to maintaining a transparent trading environment for all partners and investors. Preventive measures against misuse of technology and efforts to avoid secondary restrictions that could affect the country’s industrial and economic growth are also MITI’s current priorities.