Malaysia previously got caught in the US chip ban crossfire earlier in the year when the country was accused of, inadvertently or otherwise, helping China circumvent the NVIDIA AI chip ban. More recent reports indicate that, in addition to smugglers using our ports to ship restricted chips out, some are simply using local chips right here instead to train AI.

The Wall Street Journal reports that, in early March, four Chinese engineers, each carrying a suitcase with 15 hard drives, were flown into Malaysia from Beijing. The drives had a total of 80TB worth of spreadsheets, images and video clips, which were fed to 300 local servers containing “advanced NVIDIA chips”. These servers were rented by the engineers’ employers, with the intention of building an AI model here before bringing it back home.

Citing insiders involved, the report notes that the operation took months of preparation. Engineers spent over eight weeks optimising the data sets and adjusting the AI training program because making major tweaks once the data was out of the country would be difficult. They also opted to fly the data over via physical drives as “transferring such huge volumes of data over the internet could take months”.

Said Chinese engineers have reportedly returned home recently, with “several-hundred GB of data, including model parameters that guide the AI system’s output”. The whole manoeuvre is noted as an example of “testing the limits of US restrictions”, as it doesn’t involve shipping the restricted chips themselves into China.

(Source: WSJ)

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