KUALA LUMPUR (June 18): Malaysia is still in the process of verifying news reports of a Chinese firm using servers equipped with Nvidia chips to train its artificial intelligence (AI) model.

Servers using Nvidia and AI chips are not classified as controlled goods locally, though Malaysia would cooperate with any government that needs help in monitoring trade of goods deemed sensitive under their respective export control, said the Ministry of Investment, Trade and Industry (Miti).

Businesses — including data centres — operating in Malaysia are free to make their own commercial decisions as long as they comply with Malaysian laws and regulations, Miti said.

However, “Malaysia stands firm against any individual or company that attempts to circumvent export controls or engage in illicit trade activities,” Miti stressed.

A recent Wall Street Journal report said that in March, Chinese engineers travelled to Malaysia carrying suitcases of hard drives containing 80 terabytes of data to train AI models at data centres equipped with Nvidia chips.

The move comes as the US continues to tighten restrictions on China’s access to advanced chips used in AI development and data centres, prompting Chinese companies to look for alternative ways to access the computing power they need.

Malaysia, which has been China’s largest trading partner in Southeast Asia for over a decade, is becoming a hub for data centre investments. So far, nearly five gigawatts of data centre capacity have been announced in the country, driven by growing demand for cloud computing and AI.

Miti said on Wednesday that it remains committed to facilitating legitimate trade while promoting a secure and responsible investment environment, upholding international trade regulations and ensuring full compliance with global export control measures.

“Miti will always act firmly against any company operating in Malaysia, including those involved in semiconductor and AI industries, that violates Malaysian and international trading regulations,” it said.

“While Malaysia maintains a neutral position on unilateral sanctions, companies operating here have been advised to adhere to other countries' unilateral export controls which apply to their international business activities to avoid any secondary sanctions on their businesses,” it added.

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Chinese firms training AI models in Malaysia at Nvidia-powered data centres, WSJ reports