US reportedly plans to curb sales of AI GPUs to Malaysia and Thailand to prevent smuggling to China
The U.S. government is preparing a new set of export rules that would tighten control over the exports of advanced Nvidia AI GPUs to Malaysia and Thailand, in a bid to prevent the re-export of these components to China amid existing bans, according to Bloomberg.
A preliminary version of the new export rule, reported by Bloomberg, states that the U.S. Commerce Department would require companies to obtain a U.S. government export license before sending AI GPUs to the two Southeast Asian nations. The plan has not been finalized and may change, yet it may represent another step towards limiting Chinese entities' access to high-performance Nvidia AI GPUs.
Malaysia and Thailand are not major suspected hubs for the smuggling of Nvidia's GPUs, unlike Singapore, which is officially listed as one of Nvidia's primary sources of revenue, raising questions about whether the products sold to Singapore-based entities eventually end up in China. Indeed, Nvidia denies that its AI GPUs formally sold to Singapore-based entities could end up in China, arguing that they are sold to entities officially based in Singapore, but they are destined elsewhere. Nonetheless, it is widely believed that Singapore is a hub for smuggling high-end Nvidia GPUs to China and other sanctioned countries.
Yet, Malaysia seems like a different thing. The country is not listed as one of Nvidia's primary sources of revenue, so we do not know how much the company earns selling products to the country. However, Malaysia has emerged as a significant destination for computing equipment and components — including CPUs and GPUs essential for AI applications — sourced from Taiwan in recent quarters. Moreover, Malaysia is reportedly used to avoid U.S. import tariffs for China-made goods, which might be a concern for the U.S. Commerce Department.
Thailand is among the countries suspected of being a hub for smuggling Nvidia's AI GPUs to China. However, without formal data, we can only wonder whether the suspicion has merit.
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