Earlier this week, the Wall Street Journal reported that a Chinese company is training its artificial intelligence (AI) models using data centers in Malaysia. A total of 15 hard drives, each containing 80TB of data to train the AI, were allegedly smuggled from China to be trained using AI browser machines in Kuala Lumpur. This is seen as an attempt to circumvent the US’s access restrictions on NVIDIA chips imposed on China.
The Edge is now reporting that the Ministry of Investment, Trade and Industry (MITI) is in the process of confirming the WSJ report. MITI said that server machines using NVIDIA chips are not classified as controlled goods in the country. However, Malaysia will cooperate with any government that requires assistance in monitoring the trade of goods considered sensitive under their respective export controls.
MitI added that businesses operating in Malaysia are free to make their commercial decisions as long as they comply with Malaysian laws and regulations. If the WSJ claim proves true, it will pose a risk to the country's dream of becoming a data center for the Southeast Asian region because previously NVIDIA browsers worth RM 1.7 billion were smuggled to China from Singapore and via Malaysia.
After the US imposed restrictions on buying NVIDIA and AMD chips on China, Chinese companies trained their AI models through cloud data center services. This was later also blocked by the US.
Chinese scientists then carried out AI development in the United Arab Emirates, which caused the US to impose AI chip purchase quotas for certain countries. This barrier was lifted by the Trump administration in May, with the UAE and Saudi Arabia allowed to buy unlimited AI chips to build AI data centers worth hundreds of billions of dollars.