Bracing for chip export restrictions


KUALA LUMPUR: Malaysia is preparing for the potential impact of the United States’ plans to impose new restrictions on the export of artificial intelligence (AI) chips, says Chang Lih Kang (pic).

The Science, Technology and Innovation Minister said that if the United States implemented the measures, it would impact not only Malaysia but the entire global community.

“If the restriction is implemented, it will have an impact on Malaysia, especially given our plans to expand AI in a big way. Without AI chips, we will have problems,” he told reporters after the launch of the TalentBridge Programme and Teater at Universiti Malaya, here yesterday.

Chang said at the moment, there is still no official word on the matter.

“We do not know the types of categories and which countries are in these categories,” he added.

According to media reports, the United States is planning further restrictions on the export of AI chips to curb their use in data centres (DCs) globally, targeting both countries and companies.

Under the new measures, US-based firms can apply for blanket permission to ship chips to DCs in most parts of the world, provided no more than a quarter of their total computing power is located outside of Tier 1 countries and no more than 7% in any one Tier 2 country.

Bloomberg News had previously reported that new export regulations could be announced soon, adding a group of US adversaries would effectively get blocked from importing these chips, while the vast majority of the world would face limits on the total computing power that can go to one country.

“Of course, we heard 85% of the countries are in Tier 2, which is not the most permissive but also not the most restrictive,” said Chang.

He also said several ministries are discussing precautionary measures.

“We are in discussions with the Investment, Trade and Industry Ministry as well as the other ministries, just to take precautionary steps,” he added.

The United States’ Information Technology Industry Council, which represents companies such as Amazon, Microsoft and Meta, has said the rule would impose arbitrary restrictions on US companies’ ability to sell computing systems overseas.

In Penang, Digital Minister Gobind Singh Deo said he was aware of the matter.

He was asked about US President Joe Biden’s plan to dictate where AI chips could be shipped to.

“We (the Cabinet) need to look into the matter and discuss it before responding,” he said after launching the Exclusive Dialogue Session on Digital Adoption for Small and Medium Enterprises.

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