Customs Department Seizes RM52.9 Million In AI Chips At KLIA

Malaysia is among the countries that smugglers reportedly use to smuggle AI-related chips from the US to China. This has resulted in tighter export controls to prevent them being placed on us by the US instead. One attempt was made earlier in the month involving quite the sizable haul, which was stopped by the Customs Department, according to a report by Reuters.

The report cites KLIA customs director Zulkifli Muhammad as saying that an attempt to smuggle advanced AI chips worth RM52.9 million through the airport was stopped on 5 June. Authorities carrying out an inspection found 72 server units containing said chips flown into the airport’s free trade zone. Initial investigations indicate that they were to be re-exported to another country in Asia, but doing that would require a permit under the Strategic Trade Act.

These were falsely declared simply as “computer components” to avoid detection. Zulkifli was also cited as saying that Malaysia was listed as the transit destination to circumvent restrictions before they arrived at the destination country. But because the probe is ongoing, he did not divulge further details, including the destination country in question. The servers were confiscated, and the local company that facilitated the shipment has been called to assist investigations.

Reports indicating that Malaysia was used by smugglers as intermediaries to facilitate smuggling US-made AI chips to China surfaced back in early 2025. Then MITI minister Tengku Zafrul Abdul Aziz rejected the claims, but said that the country will tighten regulations on chip shipments anyway. In the meantime, the US has placed and lifted restrictions on chips passing through the country, before considering putting them back on again. But that has not completely stopped the craftier ones from making use of chips that remain in Malaysia to train AI, before sending the data back home.

(Source: Reuters)