The US government is planning to restrict exports of advanced AI chips to Malaysia and Thailand, aiming to tighten enforcement against suspected re-routing of semiconductors into China, according to a Bloomberg report citing sources familiar with the matter. The move is part of a draft rule being prepared by the US Commerce Department.

The draft regulation seeks to address concerns that China, which is already barred from purchasing high-end NVIDIA processors directly, may be acquiring them through intermediaries in Southeast Asia. While still subject to change, the proposal signals a shift in Washington’s approach, marking the Trump administration’s first formal step in replacing the Biden-era AI export control framework.

The proposed rule would roll back parts of the “AI diffusion rule” introduced under President Biden, which aimed to control the global spread of advanced AI capabilities. However, it is said the current draft is not considered a full replacement. It reportedly does not resolve ongoing issues such as safeguarding US chip usage in foreign data centres, particularly in sensitive regions like the Middle East.

It remains unclear if the US plans to expand the scope of restrictions beyond Thailand and Malaysia. Both countries have responded cautiously to earlier queries. Thailand indicated it was awaiting further details, while Malaysia’s Ministry of Investment, Trade and Industry (MITI) emphasised the need for consistent and transparent policies to support the technology sector.

Southeast Asia has emerged as a critical region in the global semiconductor supply chain. Malaysia, in particular, has seen a spike in chip imports and continues to attract substantial data centre investments from global firms like Oracle. Despite Malaysian commitments to scrutinise semiconductor flows more closely, the US remains wary of possible smuggling routes.

To minimise disruption, the draft rule reportedly includes temporary exemptions. US-based firms, as well as companies from select allied nations, may be allowed to continue AI chip shipments to Malaysia and Thailand without a license for a limited period following implementation. Additional waivers are also expected for key supply chain operations, such as chip packaging, which are heavily reliant on Southeast Asian facilities.

(Source: Bloomberg)

The post US Reportedly Mulling Over AI Chip Export Curbs On Malaysia And Thailand appeared first on Lowyat.NET.