Malaysia intercepted $12.2 million shipment of servers with AI chips suspected of violating export controls

Malaysia's customs department announced on Wednesday the seizure of 30 servers fitted with advanced artificial intelligence chips, suspected of being part of an export-control violation. Authorities suspect a syndicate is utilizing Malaysia as a transit hub to re-export the chips to an Asian country. In response to U.S. pressure, Malaysia implemented permit requirements for the export, transit, and transshipment of high-performance AI chips originating from the United States last year.

The U.S. aims to restrict China's access to advanced semiconductors to limit Beijing's AI and military capabilities. The stolen shipment, valued at approximately 50 million ringgit ($12.2 million), was intercepted at the free trade zone area of Malaysia's primary airport during an inspection on October 15. The servers, originating from an Asian nation, were initially declared as electric components to evade detection before being re-exported without the necessary permit, according to Aspalila Ag Tuah, the airport's customs director.

The syndicate allegedly employed Malaysia as a transit destination to circumvent any restrictions on the servers' export to the next destination, the customs department stated. The customs department believes the operation is linked to a syndicate responsible for five attempted smuggling attempts, including one in June when authorities seized 72 servers containing advanced AI chips at the airport's free trade zone.

A Malaysian firm involved in facilitating the shipment has been enlisted to assist in the ongoing investigation. Aspalila declined to provide further details on the chips' origin or their final destination, citing the case's status as an ongoing investigation.