Malaysia seizes servers with advanced AI chips suspected of violating export controls

KUALA LUMPUR, Malaysia (AP) — Malaysia’s customs department said Wednesday that it had seized 30 servers fitted with advanced artificial intelligence chips because officials suspect the shipment broke export rules. Officials believe a group involved in illegal trade is using Malaysia as a stopping point to send the chips on to another country in Asia.

Last year, Malaysia began requiring permits to export, move through the country or transfer high-performance AI chips made in the United States. The rules came after the U.S. urged Malaysia to make sure sensitive technology was not sent to China through other countries. The U.S. has tried to limit China’s access to advanced computer chips to slow the growth of its AI technology and military capabilities.

The shipment, worth about $1.6 million (6.7 million Malaysian ringgit), was stopped in a free-trade zone at the country’s main airport during an inspection on Oct. 23, airport customs director Aspalila Ag Tuan told reporters.

The servers came from an Asian country. Officials said they had been falsely listed as electrical components to avoid being detected before they were sent on to another Asian country without the required permit.

“The syndicate is using Malaysia as a transit destination to make sure there are no restrictions in place while the servers are being sent to the next destination,” the customs department said in a statement.

Aspalila said officials believe the shipment was linked to a group behind five earlier attempts to smuggle goods, including one in June when customs officers seized 130 servers containing advanced AI chips in the airport’s free-trade zone.

She said a Malaysian company that helped arrange the shipment had been called in to assist with the investigation. She declined to provide more details about where the chips came from or where they were ultimately going, saying the case was still being investigated.