Malaysian customs have foiled an attempt by specific parties attempting to smuggle advanced artificial intelligence (AI) chips through KLIA. The seized server chips are estimated to be worth around US$12.1 million (~RM49.3 million).
Local authorities discovered 30 server units filled with advanced AI chips during an inspection at the KLIA free trade zone. Reuters does not specify the country of origin of the servers, only that they originated from an Asian country. These chips were set to be re-exported to another country within the region, but that action would require that the company shipping the product obtain and have a trade permit from the Malaysian government.
“The servers were declared as ‘electronic components’ to avoid detection by the authorities,” Aspalila Ag Tuah, airport customs director, said. “Initial investigations found that the servers were to be re-exported to another country in Asia.”
The seizure marks the fifth such smuggling attempt to occur in Malaysia. Just this June, our Customs Department intercepted and halted the attempted smuggling of advanced AI chips worth RM52.9 million. 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 again, doing that would require a permit under the Strategic Trade Act.
The first known case of attempting AI chip smuggling through Malaysia goes all the way back to 2025, when it was discovered that intermediaries in Singapore, Malaysia, and the UAE were working together to smuggle US-made AI chips to China. These discoveries came after the current US government imposed trade restrictions on its AI chips, particularly those manufactured by NVIDIA, to be used by tech and AI companies in China.
To be clear, our own government has rejected claims of Malaysia being used as a smuggling hub for AI chips, and even promised to tighten its export controls on said products after being pressured by the US government. It is plain to see, however, in light of this recent seizure, these restrictions aren’t having the effect it wants.
(Source: Reuters, The Standard)
