AI chip-smuggling cases a major warning sign, says criminologist
While seizures mean enforcement is working, P Sundramoorthy says they also show that 'organised actors' are eyeing Malaysia as a potential hub to circumvent curbs on China.
A criminologist has warned that the seizure of advanced artificial intelligence (AI) chips, including those made by Nvidia, in Malaysia should serve as a major red flag. P Sundramoorthy, of Universiti Sains Malaysia, noted that the seizure in June, along with reports of other cases, suggested that organized actors were targeting Malaysia as a potential transhipment point to bypass trade restrictions and smuggle high-value chips to China.
Malaysia's appeal to criminal networks lies in its major airports and ports, extensive logistics network, free trade zones, and robust semiconductor and electronics industry. While these attributes are legitimate economic advantages, they also present opportunities for criminal exploitation. From a criminological standpoint, these cases signal that organized actors may be assessing Malaysia's vulnerabilities as a potential transit and transhipment hub, potentially marking a shift towards strategic-technology trafficking.
Sundramoorthy explained that this could involve false declarations, intermediary firms, complex ownership structures, and transhipment arrangements, making illicit transactions appear legitimate and more challenging to detect. However, the criminologist emphasized that the seizure also demonstrated that Malaysia's enforcement authorities, particularly customs, had been successful in thwarting attempts to exploit the country.
The criminological concern, therefore, should focus on identifying recurring networks, common facilitators, repeated companies, financial connections, or systematic exploitation of Malaysian logistics infrastructure.
Recently, Taiwan charged nine individuals, including Nvidia and Super Micro employees, with alleged involvement in illegally exporting AI servers to China. The US has prohibited exports or sales of these semiconductors to China without a license since 2022. In June, Malaysian customs officials intercepted 72 server units with advanced AI chips, worth RM52.9 million, en route to another Asian country.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- AI chip-smuggling cases a major warning sign, says criminologist freemalaysiatoday.com
