The Trump administration is preparing to impose new restrictions on the export of artificial intelligence chips made by companies like Nvidia to Malaysia and Thailand, according to sources familiar with the discussions.
This move aims to cut off potential pathways for advanced semiconductor technology to reach China via these Southeast Asian countries, following the existing ban on direct sales of Nvidia’s top-tier AI processors to China.
A draft rule from the US Commerce Department targets these nations, seeking to prevent Nvidia’s chips from being diverted to China through third-party actors. The proposed regulation remains under review and could undergo revisions before becoming official, said people familiar with the matter.
Officials have not yet ruled out extending these new AI chip shipping controls to additional countries beyond Malaysia and Thailand. Testifying to lawmakers last month, Secretary Howard Lutnick emphasized Washington’s stance that they will permit its allies to purchase AI chips, provided their use is managed by an approved US-operated data center and controlled by an American-approved cloud provider.
Nvidia CEO Jensen Huang, in remarks not specific to any country, has previously asserted that there is no evidence of AI chip diversion to China, while warning that overregulation could enable China to gain dominance in AI markets.
The long-held US position has been to encourage global reliance on American AI technology. However, US officials continue to worry that once chips are exported, they could eventually find their way into China or facilitate indirect benefits for Chinese AI firms through remote data center access outside China.
Southeast Asia has become a focal point for these concerns as global tech giants ramp up investments in the region. Oracle Corp. is rapidly expanding its data center footprint in Malaysia, while Alphabet, Microsoft, and Amazon Web Services have all announced new investments in Thailand.
To minimize disruption for companies with substantial stakes in Malaysia and Thailand, sources say the planned export restrictions will include phased implementation and exemptions. US-headquartered firms and those from allied countries would be allowed to continue AI chip shipments for several months following the rule’s publication, without needing a license.
Additional exceptions are likely to ensure supply chain continuity, as many semiconductor giants depend on Southeast Asian manufacturing hubs for essential processes such as chip packaging—the step that prepares semiconductors for integration into devices.
