The logo of Nvidia Corporation during the annual Computex computer exhibition in Taipei, Taiwan, on May 30, 2017.
The Malaysian Trade Ministry said that companies have been advised to adhere to other countries’ export controls to avoid secondary sanctions.
Malaysia’s government stated on June 18 that it is investigating media reports that a Chinese company used servers equipped with Nvidia artificial intelligence (AI) chips in the country to train large language models.
The Malaysian Trade Ministry said in a statement that it was “verifying the matter with relevant agencies if any domestic law or regulation has been breached,” without identifying the specific media reports that triggered the probe.
The ministry stated that such actions do not violate Malaysian laws, as servers containing Nvidia and AI chips are not classified as controlled goods under the country’s trade regulations.
The ministry stated that the country would “cooperate with any government that requires assistance in monitoring trade in sensitive goods under the export control of their respective countries.”
“Malaysia stands firm against any individual or company that attempts to circumvent export controls or engage in illicit trade activities,” it stated.
The ministry also stated that data centers operating in Malaysia are free to make their own commercial decisions, provided that they operate “within the scope of Malaysian laws and regulations.”
“While Malaysia maintains a neutral position on unilateral sanctions, companies operating here have been advised to adhere to other countries’ unilateral export controls which apply to their international business activities to avoid any secondary sanctions on their businesses,” the ministry stated.
Malaysian Trade Minister Tengku Zafrul Aziz visited Washington this week for talks with Secretary of Commerce Howard Lutnick.
The country is seeking to secure a trade deal with the United States that will help it avert President Donald Trump’s tariff hikes before a 90-day pause ends in July.
Commenting on the matter, Chinese Foreign Ministry spokesperson Guo Jiakun told reporters on June 19 that China is willing to cooperate with Malaysia to “defend the free and open international trade order.”
“China is also against any action that coerces countries to limit their cooperation with China,” Guo said, noting that Beijing requires Chinese companies to operate in accordance with local laws and regulations.
In 2022, the Biden administration imposed restrictions on the export of advanced and high-performance AI chips, citing concerns that such technologies could be used for military purposes.
The Trump administration has since scrapped the curbs, but it issued guidance reminding U.S. companies that if they know that an AI chip used in Chinese AI model training will be used for a weapon of mass destruction then a license may be required.
Last month, Sens. Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) sent a letter to Nvidia to raise concerns over the company’s planned facility expansion in China.
Companies operating in China, whether they are Chinese or foreign companies, are subject to laws that authorize the Chinese Communist Party (CCP) to seize information and property.
The senators said that Nvidia’s presence in China leaves the company vulnerable to “continuous pressure” to comply with demands such as forced technology transfers and state-backed espionage.
Regarding the letter, a Nvidia spokesperson told The Epoch Times on May 29 that “NVIDIA is simply leasing a new space for existing employees, who need the room in the post-COVID return to work.”
The spokesperson said the company will maintain its scope of work in China.
