Malaysia’s investigation reveals how complex supply chains can become loopholes in a high-stakes geopolitical battle – from security to market dominance.
Malaysia has launched an investigation into reports that high-end Nvidia AI chips – which were subject to stringent U.S. export controls – were allegedly transferred from Singapore and may have passed through Malaysian firms en route to China.
The case has triggered concerns about Malaysia’s role in the evolving global AI supply chain and its vulnerability to becoming a conduit in circumvention of international sanctions.
The probe was prompted by developments in Singapore, where three individuals were charged in a U.S. server fraud case involving Dell and Supermicro hardware.
It was alleged that these servers, were outfitted with restricted Nvidia H100 and A100 chips, and exported via Singapore to a company in Malaysia. Authorities are now investigating whether the exports continued to restricted destinations or remained within local borders.
“If there is any involvement of Malaysian companies, we will take necessary action,” Malaysia’s Trade Minister Tengku Zafrul Aziz said while speaking to news media.
Nvidia’s top-tier chips are under U.S. export restrictions due to their potential applications in military-grade systems and large-scale surveillance. Unauthorized redistribution not only undermines U.S. sanctions but also poses a broader challenge to the integrity of global technology governance.
The sharp rise in Nvidia imports—peaking at USD 2.74 billion in April 2025, according to customs data—has fueled suspicions that Malaysia may be emerging as a trans-shipment hub for restricted chips.
Malaysia’s Ministry of Investment, Trade and Industry has formed a special task force, jointly led by its Digital Ministry, to evaluate and strengthen its export control laws under the Strategic Trade Act. Several agencies—including customs, police, and the communications commission—are collaborating to audit shipments and company records…to read more, click here.