Wednesday, 30 July 2025

Data centre plans survive chip directive

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KUALA LUMPUR: Data centre plans in Malaysia remain on track despite a new government directive requiring export permits for US-made high-performance AI chips, MIDF Amanah Investment Bank Bhd said on Tuesday.

The Ministry of Investment, Trade and Industry (MITI) recently mandated a Strategic Trade Permit (STP) for all exports, transshipments and transits of such chips, raising questions about possible disruptions. But MIDF believes the directive has no impact on domestic AI infrastructure.

“This is not additional red tape. The rule only applies if chips are moved out of Malaysia,” it said in a research note.

The move is seen as part of Malaysia’s effort to prevent chip smuggling to China and demonstrate regulatory seriousness amid Washington’s evolving export controls.

“MITI’s directive helps reassure the US of Malaysia’s enforcement capability,” MIDF said, adding that upcoming negotiations will likely focus on compliance and end-user monitoring.

The bank also noted speculation of a shift from Washington’s tier-based chip control system to a licensing regime favouring US allies – potentially allowing Malaysia to exceed current AI compute limits.

Regardless of changes under Trump’s revised AI Diffusion Rule, MIDF says the goal remains: to restrict China’s access to US AI chips. – BERNAMA

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