Malaysian customs foil $13 million AI chip smuggling bid

Sepang, Malaysia: Malaysian authorities foiled an attempt to smuggle advanced artificial intelligence chips through the country's main airport, customs officials said on Friday, in a case worth nearly $13 million. A team raided Kuala Lumpur airport's free trade zone on June 5 and seized 72 servers that were reportedly bound for export to another Asian country, airport customs director Zulkifli Muhammad said. Malaysia tightened export and transshipment controls on chips from the United States last year, requiring a strategic trade permit and advance notification if there is suspicion of misuse or diversion. The Southeast Asian nation, as a growing data-centre hub, is seeking to prevent itself from being used as a transit point for restricted chips headed elsewhere. "The servers were declared as 'computer components' to avoid detection from the authorities," Zulkifli told a news conference. The syndicate involved used Malaysia as a transit point to ensure there were no restrictions during the export process, The Star daily newspaper said. Zulkifli declined to say where the servers came from, where the chips were made, or where they were headed, adding that investigations were continuing. However, he said a local logistics company involved in the shipment had been asked to assist in the investigation. The United States has been tightening restrictions on exports of advanced semiconductors through Malaysia and Thailand in an effort to curb their diversion to China. Malaysia has also launched several probes, including one into how servers containing US-made Nvidia chips destined for Singapore ended up in Malaysia.