AI chips worth $12.1 million seized at Malaysia airport, customs authority says

KUALA LUMPUR, Oct 28 (Reuters) - Malaysian customs authorities have seized approximately 49.5 million ringgit, equivalent to $12.11 million, worth of advanced artificial intelligence chips this month. The operation is part of an ongoing investigation into a syndicate suspected of smuggling high-performance semiconductors through the country’s primary airport.

Last year, Malaysia implemented export controls on the movement of advanced AI chips originating from the United States due to pressure from the US government. The objective was to prevent the flow of such chips into China.

On October 15, during an inspection at Kuala Lumpur International Airport’s free trade zone, authorities discovered 30 server units containing advanced AI chips. Aspalila Ag Tuah, the airport’s customs director, informed reporters about the seizure. The investigation revealed that the shipment, which originated from an Asian country, was intended for re-export to another nation on the continent. This particular re-export required a trade permit, as stated by Aspalila.

The server units were falsely declared as electronic components, and the shipment proceeded through Malaysia to circumvent any potential restrictions while being exported to the next destination. A Malaysian firm that aided in facilitating the shipment has been enlisted to assist with the ongoing investigation.

The customs authority suspects that this shipment is linked to a network responsible for a similar smuggling attempt thwarted by customs authorities in June. Aspalila mentioned that at least five cases are linked to this syndicate, involving the seizure of chips worth more than 100 million ringgit in total. However, she declined to provide further details citing the sensitivity of an ongoing probe.