Malaysia has tightened controls on exports of U.S.-origin AI chips to clamp down on chip smuggling to China.
Starting immediately, anyone exporting or transshipping these AI chips from Malaysia must notify authorities 30 days in advance. The move was announced Monday by Malaysia’s Ministry of Investment, Trade and Industry.
This follows multiple reports of U.S. AI chips being illegally funneled into China. In April, Anthropic detailed extreme smuggling methods, including GPUs hidden in prosthetic baby bumps and shipped alongside live lobsters. 
Malaysia is making clear it will enforce these new export rules strictly.
“Malaysia stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual or company, who will face strict legal action if found violating the STA 2010 or related laws,” the Ministry wrote in a press release.
The crackdown aligns with efforts by the U.S. government. Recent Bloomberg reporting revealed the Trump administration is planning tighter export restrictions on AI chips destined for Malaysia and Thailand to block China from alternative supply routes. No official announcement has dropped yet.
The U.S. Department of Commerce is also drafting fresh broad AI chip export limits now that it rescinded Biden’s AI Diffusion rules in May.
This signals a global tightening to stop China’s AI chip smuggling networks—ones already running wild.
