Key Takeaways
- • Malaysia is considering a law that would allow the government to monitor data centre operations, including their use of high-performance chips, Trade Minister Johari Abdul Ghani said on Thursday.
- • Prospective data centre developers would be required to disclose facility operators, locations, and the number of GPUs being imported, per Johari's ministry event remarks.
- • Johari said the government will ensure US-restricted chips are imported only for domestic use and not for re-export, stating that illegal transactions "will not happen in this country."
- • The government has no plans to investigate Speedmatrix, a Malaysian unit of Singapore-based Megaspeed, despite allegations it channelled Nvidia chips to Chinese users.
- • The proposal follows renewed scrutiny over whether Malaysia is being used to circumvent US restrictions on advanced AI chips, after a scandal involving Nvidia CEO Jensen Huang and alleged ties to a suspected Chinese spy.
Summary
Malaysia is weighing legislation that would give the government oversight of data centre operations, including their use of high-performance chips, Investment, Trade and Industry Minister Johari Abdul Ghani said on Thursday, according to Reuters. The proposal comes as the Southeast Asian country faces renewed scrutiny over whether it is being used by companies to circumvent US restrictions on advanced artificial intelligence chips.
The scrutiny has been intensified by a scandal involving Nvidia Corp chief executive Jensen Huang and his alleged ties to a suspected Chinese spy. Malaysia imposed export controls last year on the movement of US-origin high-performance AI chips, following pressure from Washington to stem their flow to China.
Under the proposed framework, applicants planning to build data centres would be expected to disclose the facilities' operators and locations, as well as the quantity of graphics processing units (GPUs) being brought into the country. At a press conference, Johari said Malaysia must ensure that chips subject to US restrictions are imported solely for domestic use rather than re-export. "If they want to use this country to trade something that is defined as an illegal transaction, we need to make sure that it will not happen in this country," he said.
Johari also said the government had no plans to open investigations into Speedmatrix, a Malaysian unit of Singapore-based cloud computing firm Megaspeed, following allegations that it may have been used to channel Nvidia chips to Chinese users. He said that if companies buy GPUs for their own use in data centres, he could not see what law would be applicable to investigate them.
In a statement on its website dated Thursday, Megaspeed said it takes its compliance obligations under US export control laws extremely seriously and is committed to working constructively with the US government. Chairman and chief executive James Tan Yong Pong said the company "welcomes appropriate government scrutiny" and is committed to demonstrating that it operates responsibly and in accordance with applicable US laws.
The scrutiny has been intensified by a scandal involving Nvidia Corp chief executive Jensen Huang and his alleged ties to a suspected Chinese spy. Malaysia imposed export controls last year on the movement of US-origin high-performance AI chips, following pressure from Washington to stem their flow to China.
Under the proposed framework, applicants planning to build data centres would be expected to disclose the facilities' operators and locations, as well as the quantity of graphics processing units (GPUs) being brought into the country. At a press conference, Johari said Malaysia must ensure that chips subject to US restrictions are imported solely for domestic use rather than re-export. "If they want to use this country to trade something that is defined as an illegal transaction, we need to make sure that it will not happen in this country," he said.
Johari also said the government had no plans to open investigations into Speedmatrix, a Malaysian unit of Singapore-based cloud computing firm Megaspeed, following allegations that it may have been used to channel Nvidia chips to Chinese users. He said that if companies buy GPUs for their own use in data centres, he could not see what law would be applicable to investigate them.
In a statement on its website dated Thursday, Megaspeed said it takes its compliance obligations under US export control laws extremely seriously and is committed to working constructively with the US government. Chairman and chief executive James Tan Yong Pong said the company "welcomes appropriate government scrutiny" and is committed to demonstrating that it operates responsibly and in accordance with applicable US laws.
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