US Considers AI Chip Export Restrictions to Malaysia and Thailand to Prevent China Access

Reviewed byNidhi Govil

6 Sources

The US government is planning new export rules to limit the sale of advanced AI GPUs to Malaysia and Thailand, aiming to prevent their re-export to China amid existing bans.

US Plans New Export Controls on AI Chips

The United States government is preparing to implement new export rules that would tighten control over the sale of advanced AI GPUs to Malaysia and Thailand. This move is primarily aimed at preventing the re-export of these high-performance components to China, circumventing existing bans 1.

Source: Bloomberg Business

Source: Bloomberg Business

Proposed Restrictions and Their Implications

According to a draft rule from the Commerce Department, companies would be required to obtain a U.S. government export license before sending AI GPUs to these two Southeast Asian nations 2. This proposal is part of the Biden-era "AI Diffusion" rule, which aims to control the global distribution of advanced AI technologies 3.

The restrictions could significantly impact companies like Nvidia, whose high-end AI chips are at the center of this regulatory effort. While the rule is not yet finalized and may undergo changes, it represents a concerted effort to close loopholes that Chinese companies have been exploiting, such as renting AI GPUs or accessing them through Southeast Asian countries 4.

Balancing Trade and Security Concerns

US Commerce Secretary Howard Lutnick outlined the core policy:

"The US will allow our allies to buy AI chips, provided they're run by an approved American data center operator, and the cloud that touches that data center is an approved American operator." 4

This approach aims to strike a balance between allowing legitimate trade with allies and preventing unauthorized access by Chinese entities. The proposed rules may include provisions for AI chip exports to these nations only if they are utilized by companies with headquarters in the U.S. and operating subsidiaries in Malaysia and Thailand 5.

Source: Benzinga

Source: Benzinga

Global AI Landscape and Industry Impact

The tightening of export controls reflects the evolving global AI landscape. China's development of domestic AI chip alternatives, such as Huawei's Ascend, indicates a shift in the international AI balance 4. For companies like Nvidia, these regulations have already resulted in a significant reduction in business in China.

As the U.S. government grapples with the challenge of controlling AI chip distribution while maintaining technological leadership, the industry awaits the final formulation of the "AI Diffusion" policy. The outcome of these regulations will likely have far-reaching implications for the global AI industry, international trade relations, and the competitive landscape of AI technology development.

Source: Wccftech

Source: Wccftech

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