Malaysian customs officers have seized 30 servers containing advanced AI chips at Kuala Lumpur International Airport, in what they said on October 28 was the fifth case this year linked to the same suspected smuggling syndicate.
The servers, worth nearly 49.5 million ringgit, or about $12 million, were found during an inspection of a warehouse in the airport’s free trade zone on October 15. KLIA Customs director Aspalila Ag. Tuah said preliminary investigations found they had been brought in from an Asian country under a single air waybill that declared them as electronic components, allegedly to evade detection, before being re-exported to another Asian country without the required authorization.
“The syndicate also used Malaysia as a transit point to ensure there were no restrictions on the export of the servers to their next destination,” she told a press conference in Sepang.
Aspalila said the combined value of the five seizures exceeds 100 million ringgit. One earlier case came in June, when customs seized 72 servers containing advanced AI chips in the same free trade zone. Companies that handled the shipments have been called in to assist investigators, but no arrests have been made.
Officials did not name the chipmaker, the country the servers came from or their destination. Masyita Ismail, a senior assistant director at the Investment, Trade and Industry Ministry’s Strategic Trade Secretariat, said those details could not be disclosed while investigations continue. She said high-performance AI chips are controlled as dual-use items under the Strategic Trade Act 2010, which covers goods that can be used to develop weapons of mass destruction. The national news agency Bernama reported that the chips could potentially be used to develop military technology.
Malaysia introduced permit requirements for the export, transit and transshipment of high-performance AI chips of US origin last year, under US pressure to keep such technology from being rerouted to China through third countries. Under the ministry’s directive, chips with a Total Processing Performance score of 4,800 or higher, or 1,600 or higher combined with a performance density of 3.2 or higher, need a permit, which must be sought 30 days before the chips are brought into the country.
All five cases are being investigated under Section 12 of the Strategic Trade Act. It provides for fines of up to 20 million ringgit for a company and, for an individual convicted of a willful offense, a fine of up to 10 million ringgit, up to 10 years in prison, or both.
In a separate case, US prosecutors said this month that servers in an alleged $300 million smuggling scheme went first to Malaysia and Singapore before being redirected to buyers in China. Taiwan is also moving to make unlicensed AI chip exports to China a crime.
Sources: Malay Mail, Associated Press
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By the Control Plane Editorial Team