Malaysia’s AI Plans May Face Uncertainty Due to US Policy Changes

PETALING JAYA: The implications of restrictions on artificial intelligence (AI) chip exports from the United States are currently unclear, according to analysts, as stated by the National AI Office (NAIO).

A representative from NAIO commented that many factors, particularly the so-called "US standards," are still somewhat ambiguous.

He emphasized that the specific details surrounding the blockade are not well-defined and that they require careful evaluation by the Malaysian government.

Despite these uncertainties, Malaysia remains committed to exploring various opportunities in the AI sector, in accordance with its national strategic roadmap.

"We recognize the United States as a significant strategic partner for Malaysia, and our relationship with them is excellent," he continued, when speaking to The Star.

The NAIO intends to maintain close collaboration with American counterparts as well as local partners to address the ongoing situation.

Recently, news emerged regarding US President Joe Biden's plan to limit the export of AI chips, aiming to curb the potential use of advanced technologies by adversaries.

This initiative proposes three levels of export restrictions.

The first tier offers unrestricted access to US-made chips for 18 allied and friendly nations, while imposing new limitations, including caps on computing power, for other countries.

For Tier Two countries, which include Malaysia and many others, the limit on computing power will be approximately 50,000 graphics processing units from 2025 to 2027.

Companies in these nations may bypass these restrictions by obtaining a validated end-user designation, provided they satisfy US security standards, which encompass physical, cyber, and personnel concerns, in addition to human rights considerations.

Countries classified in the third tier will be completely prohibited from receiving US chip exports under the new guidelines. This category includes China and any nations subject to a US arms embargo.

An expert has stated that if put into effect, the restrictions on AI chip trade could significantly challenge Malaysia's technology sector.

Dr. Arumugam G. Sithamparam, a senior lecturer at the Asia-Pacific University of Technology and Innovation, pointed out that this could obstruct data centers from effectively supporting advanced AI workloads and maintaining their competitive edge in the market.

Arumugam, who also provides expert commentary for the 15th Parliamentary Special Select Committee on Finance and Economy, noted that these measures could undermine Malaysia’s ambitions to become a leader in the global semiconductor and data center industries.

He added, "Adhering to US security and human rights standards could provide Malaysia with new opportunities to strengthen its role in the semiconductor supply chain and build closer ties with prominent US technology firms.

"In a rapidly evolving global landscape, Malaysia must address these restrictions carefully, balancing its economic goals with compliance to US regulations," he remarked, highlighting the recent surge in investment in data centers throughout the country.

Malaysia, AI, Export