Malaysia is investigating an unnamed Chinese company’s potential usage of Nvidia chips that are banned under US export controls.

The Ministry of Investment, Trade and Industry (MITI) is “still in the process of verifying the matter with relevant agencies if any domestic law or regulation has been breached.”

Malaysian domestic law does not list Nvidia's chips as a ‘controlled good’, but the statement emphasized that “Malaysia will cooperate with any government that requires assistance in monitoring trade in sensitive goods under the export control of their respective countries.”

This alludes to guidance released by the US Bureau of Industry and Security (BIS) on May 13, 2025, which states that entities allowing American AI chips to be used for training and inference of Chinese AI models may be liable to “civil or criminal enforcement action.”

The statement mentions “a few media reports on the use of servers equipped with Nvidia chips”, which likely refers to an article published last week by The Wall Street Journal, which detailed the practice of Chinese engineers flying hard drives worth of data into Malaysia in order to use Nvidia’s chips.

Just one month ago, Malaysia found itself in another chip-related controversy when the Deputy Minister of Communications made a speech about the government’s plans to use 3,000 Huawei Ascend AI chips for sovereign AI infrastructure. MITI immediately distanced itself from the statement, given that BIS’ guidance also stipulates against the use of Ascend chips anywhere in the world.

Successive American governments have put increasingly strict sanctions on Chinese use of US-made components for AI systems, such as semiconductors, citing reasons of national security.