Malaysia investigates Chinese firm's use of Nvidia AI chips for model training
Malaysia's Ministry of Investment, Trade and Industry is investigating reports that a Chinese company allegedly used Malaysian data centres with Nvidia chips to train AI models, reportedly to circumvent US export restrictions on advanced semiconductors. The ministry stated that while such servers are not controlled items under Malaysian law, it will cooperate with other countries monitoring sensitive goods trade and act against companies violating international trading regulations.
What happened
A Wall Street Journal report alleged that a Chinese company transported 80 terabytes of data via suitcases to Malaysia in March 2025 to train artificial intelligence models using servers equipped with Nvidia chips in local data centres.
Malaysia's Ministry of Investment, Trade and Industry announced it is verifying reports that the Chinese company used Malaysian servers to train AI systems, reportedly as part of an effort to circumvent US export restrictions on advanced semiconductors.
Reported impact
The alleged activity raises concerns about circumvention of US export controls on advanced AI hardware, with Malaysia potentially becoming an alternative computing hub as access to high-performance chips becomes increasingly limited for China.
Index analysis
Servers using Nvidia or other AI-related chips are not categorized as controlled items under Malaysia's Strategic Trade Act 2010, though the ministry noted it would cooperate with countries monitoring trade of sensitive goods under their export controls.
Governance controls
Malaysia's ministry affirmed that data centres are permitted to make commercial decisions freely as long as they operate within Malaysian regulations, and stated it remains committed to acting firmly against companies that violate Malaysian and international trading regulations.
The ministry emphasized Malaysia's compliance with global trade rules including export controls relevant to the semiconductor and AI sectors, and reminded companies operating in Malaysia to comply with other countries' export controls in their international dealings to avoid secondary sanctions.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.