Malaysia Requires Trade Permits for Nvidia and Other US-Origin AI Chips Bound for China, Violators to Face Strict Action.

Malaysia has announced that exports, transshipments, or transits of high-performance AI chips of US origin will require a government-issued trade permit, effective immediately. The move aims to close regulatory loopholes and prevent the flow of restricted chips to China, amid concerns over their use in advanced AI development and military applications. Violators will face strict legal action. Nvidia CEO Jensen Huang is reportedly planning a diplomatic visit to China to launch a scaled-down version of its AI chip, modified to meet US export rules.

Malaysia has implemented new regulations that require government-issued trade permits for the export, transshipment, or transit of high-performance artificial intelligence chips of US origin. This move, effective immediately, aims to close regulatory loopholes and prevent the flow of restricted chips to China, particularly amid concerns over their use in advanced AI development and military applications [2].

The announcement follows growing pressure from the United States to halt the flow of restricted chips, especially from Nvidia Corporation (NVDA), to China. Malaysia's Trade Minister Tengku Zafrul Aziz stated in March that the country would take "necessary action" if domestic firms were involved in allegedly fraudulent Nvidia chip transshipments via Singapore [2].

The new rules require companies to notify authorities at least 30 days in advance before moving such items, even if they are not listed on Malaysia's current strategic goods registry. Violators will face strict legal action, underscoring the government's commitment to enforcing export controls [2].

In parallel, Nvidia CEO Jensen Huang is reportedly planning a diplomatic visit to China. The company aims to launch a scaled-down version of its AI chip, modified to meet US export rules. The new chip, based on the Blackwell RTX Pro 6000 but without advanced features, could be unveiled as early as September [3].

This move comes amidst the ongoing US-China trade tensions and the broader strategic decoupling between the two nations. The new export controls and trade permits in Malaysia are part of a broader effort to prevent Chinese firms from obtaining high-end AI chips to train their models [1].

References:
[1] https://asiatimes.com/2025/07/us-plans-to-tighten-ai-chip-export-rules-for-malaysia-thailand/
[2] https://www.benzinga.com/markets/tech/25/07/46385002/nvidia-other-us-origin-ai-chips-shipments-to-china-will-now-require-trade-permits-says-malaysia-rule-violators-to-face-strict-action
[3] https://cryptorank.io/news/feed/2379e-nvidia-nvda-to-launch-new-ai-chip-specifically-for-china-ft