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- The U.S. is planning tighter export rules for AI chips sent to Malaysia and Thailand.
- New licenses will be required to ship Nvidia’s high-end GPUs to the two countries.
- Washington suspects some AI hardware is being redirected to China through Southeast Asia.
- The rules mark a shift toward targeted enforcement of AI chip export controls.
The United States is preparing a fresh round of export controls targeting the shipment of advanced AI chips to Malaysia and Thailand. This marks a new escalation in Washington’s campaign to block China from accessing high-performance Nvidia GPUs that are essential for training large-scale artificial intelligence models.
According to sources familiar with the matter, the draft rules, which are still under review by the U.S. Commerce Department, would require exporters to apply for licenses before sending these chips to either country.
This potential crackdown comes amid growing concern that Southeast Asia is being used as a transit point for restricted technology. While direct exports of top-tier Nvidia chips to China are already banned, U.S. officials fear that shipments to nearby nations may be getting re-exported to Chinese entities through informal or undisclosed channels.
Malaysia and Thailand face mounting suspicion
Though Malaysia and Thailand are not officially listed among Nvidia’s primary revenue-generating regions, their roles in the broader semiconductor ecosystem have expanded rapidly.
Malaysia, in particular, has emerged as a vital hub for semiconductor assembly and testing, with exports totaling $37 billion in 2024. Over a third of those shipments went to China and Hong Kong. Thailand has also seen increased chip-related activity, with exports to China surpassing $800 million in the same period.
Recent reports have further fueled Washington’s concerns. One case involved Chinese engineers allegedly transporting AI training data to Malaysia, renting hundreds of Nvidia-powered servers to complete training, and then carrying the output back to China. The operation was reportedly facilitated through Singapore-based shell companies and a newly formed firm in Kuala Lumpur, allowing the actors to mask their real affiliations.
New rules aim to plug loopholes in enforcement
The proposed export controls would represent the first time Washington has imposed such restrictions specifically targeting Malaysia and Thailand.
While broader restrictions already apply to over 150 countries, U.S. regulators are now focusing on countries where diversion risks appear to be growing. The move reflects a more surgical approach to enforcement, one that prioritizes locations linked to suspected backdoor exports to China.
Under the planned rules, even if the buyer in Malaysia or Thailand is not directly connected to China, the shipment could still require licensing. U.S. authorities also plan to boost enforcement capacity and conduct closer inspections on potentially sensitive exports.
Balancing control with supply chain continuity
Despite the tougher stance, the U.S. government is expected to include limited exemptions to avoid disrupting global supply chains. Companies involved in routine packaging or testing operations , common in both Malaysia and Thailand, may be granted temporary waivers, depending on the final structure of the rule.
So far, neither the Malaysian nor Thai governments have issued official responses to the proposed measures. However, the expected changes signal that Washington is widening its net as it seeks to tighten control over the global AI chip trade, ensuring that even indirect routes to China are effectively blocked.
