US mulls AI chip restrictions for Malaysia and Thailand, to stop flow of AI chips to China

The US Commerce Department is exploring new AI chip export restrictions that would stop AI chips from being smuggled through Southeast Asia and into China.

2

In a new report from Bloomberg, we're hearing that the US Commerce Department is seeking to close the loopholes that are seeing the flow of AI chips into China. We've seen Chinese companies using loopholes like renting AI GPUs or accessing them through Southeast Asian countries like Malaysia and Thailand.

The US Commerce Department is preparing a draft for China that would see new restrictions on accessing AI chips through backdoors in Malaysia and Thailand, with claims that both countries would be slapped with increased restrictions. One of the new methods would be allowing AI chip exports into nations only if they're used by those companies that have headquarters in the United States and are operating subsidiaries in Malaysia and Thailand.

The US government is still working on the final parts of how to frame the Biden-era "AI Diffusion" rule, according to US Commerce Secretary Howard Lutnick, who explained: "the US will allow our allies to buy AI chips, provided they're run by an approved American data center operator, and the cloud that touches that data center is an approved American operator".