Jitters over ban on AI chip exports
According to Bloomberg, a draft rule from the US Commerce Department seeks to prevent China, which faces a US ban on sales of Nvidia's advanced AI processors, from obtaining such components through intermediaries in the two Southeast Asian nations, said people familiar with the matter.
The rule has yet to be finalised and could still change, said the sources, who requested anonymity.
Pathom Indarodom, managing director of SVOA, said this move may result in the US slapping export restrictions on Thailand for high-tech equipment, especially Nvidia's flagship graphics processing unit (GPU) chips such as A100, H100 and the latest Blackwell B200.
These chips power AI models globally, from OpenAI and Google to emerging deep tech startups, government agencies and universities, said Mr Pathom.
He said if access to these chips is blocked, Thailand could experience major disruptions, mainly in AI development research and local AI startups, which rely on Nvidia GPUs to train and test models.
This would also affect Thailand's competitiveness at the global level, said Mr Pathom.
Moreover, major Thai cloud providers that utilise Nvidia chips would be impacted as their AI-as-a-service offerings would be unable to scale, he said.
Enterprise clients may shift workloads overseas, while national data sovereignty faces rising risks as data processing will move to offshore, said Mr Pathom. The overall effect would chill Thailand's goal of becoming a regional AI hub, he said.
If Western technology is inaccessible, Thailand might have to shift to alternative technology from China. Geopolitical tensions demand Thailand devise backup plans by investing in open-source AI models, said Mr Pathom.
Thailand should forge strategic tech alliances with other Asian nations to create a resilient AI ecosystem, he said.
According to the Board of Investment, from 2022 to 2024 investment promotion applications for data centre and cloud services totalled 27 projects with a combined investment of 290 billion baht.
There were eight new data centre projects in the first five months of this year valued at 183 billion baht.
According to a report from Cushman & Wakefield, a leading commercial real estate services firm, Malaysia's strong data centre development will see its population per megawatt ratio consolidate faster than any other Asia-Pacific market through 2030, with Thailand ranked second and Japan third for fastest rates of consolidation.
Supparat Singhara na Ayutthaya, general manager for Southeast Asia at Damac Digital, a data centre builder, expressed concern over the planned restriction on shipments of AI chips to Malaysia and Thailand, noting it could undermine investor confidence in Thailand's cloud and data centre industry.
He said the Commerce Ministry and Digital Economy and Society Ministry need to collaborate to impose stricter export controls in Thailand, while actively engaging with the US government.
If left unaddressed, Thailand may find itself excluded from access to the latest technological advancements, said Mr Supparat.
NO DIRECT SANCTIONS
Somchai Sittichaisrichart, managing director of SIS Distribution, said the planned US regulation does not directly sanction Thailand, instead introducing stricter oversight to prevent Chinese firms from accessing AI computing services or importing chips via Thai nominees.
"Thai companies can still import AI chips," he said.
"However, once the regulation takes effect, scrutiny will likely extend beyond the importer to the intended use, particularly to ensure chips are not deployed for Chinese customers."
A source in the cloud service sector who requested anonymity said his company may consider expanding operations from Thailand to other countries to mitigate potential risks from the planned US rules.
Putt Tratkosit, chief executive of Light Up Total Solution Plc (LTS), said the company does not face any risk or direct impact from the US plan to restrict shipments of AI chips to Malaysia and Thailand.
He said the company is not involved in importing chips for resale to China.
LTS provides design and installation services for AI infrastructure, as well as commissioning services for government agencies and companies in Thailand.
The company works closely with Siam AI Corporation, a high-performance cloud and AI infrastructure provider, which is the only certified Nvidia Cloud Partner in Thailand authorised to purchase Nvidia chips directly from the US.
Should US export control measures take effect in the future, importing chips may require additional approval.
However, the regulation does not prohibit domestic use, meaning AI and data centre services can continue operating normally, said Mr Putt.
Demand for AI solutions in Thailand remains strong, and LTS sees a short-term upside as customers may accelerate imports of AI chips, leading to faster deployment of infrastructure projects, he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
5 hours ago
- Bangkok Post
China pressures rebels in Myanmar rare-earth belt
The global supply of heavy rare earths hinges in part on the outcome of a months-long battle between a rebel army and the Chinese-backed military junta in the hills of northern Myanmar. The Kachin Independence Army since December has been battling the junta over the town of Bhamo, less than 100 kilometres from the Chinese border, as part of the civil war that erupted after the military's 2021 coup. Nearly half the world's supply of heavy rare earths is extracted from mines in Kachin state, including those north of Bhamo, a strategically vital garrison town. They are then shipped to China for processing into magnets that power electronic vehicles and wind turbines. China, which has a near-monopoly over the processing of heavy rare earths, has threatened to halt buying the minerals mined in KIA-controlled territory unless the militia stops trying to seize full control of Bhamo, according to three people familiar with the matter. The ultimatum, issued by Chinese officials to the KIA in a meeting earlier this year, underscores how Beijing is wielding its control of the minerals to further its geopolitical aims. One of the people, a KIA official, said the Chinese demand was made in May, without detailing where the discussions took place. Another person, a KIA commander, said Beijing was represented by foreign ministry officials at the talks. Reuters could not determine whether China had carried out its threat. Fighting in the region has restricted mining operations and rare-earth exports from Myanmar have plunged this year. China spooked global supply chains this spring when it restricted exports of the minerals in retaliation against US President Donald Trump's tariffs. It is now using its dominance to shore up Myanmar's beleaguered junta, which China sees as a guarantor of its economic interests in its backyard. China's foreign ministry said in response to Reuters' questions that it was not aware of the specifics of deliberations with the KIA. 'An early ceasefire and peace talks between the Myanmar military and the Kachin Independence Army are in the common interests of China and Myanmar as well as their people,' a ministry spokesperson said. A senior KIA general did not respond to a request for comment. The KIA official, who spoke on condition of anonymity to discuss sensitive matters, said Beijing also offered a carrot: greater cross-border trade with KIA-controlled territories if the militia abandoned efforts to seize Bhamo, a logistics hub for the junta and home to some 166,000 people. 'And if we did not accept, they would block exports from Kachin State, including rare-earth minerals,' said the official, who did not elaborate on the consequences of an economic blockade. Beijing is not seeking to resolve the wider civil war but it wants fighting to subside in order to advance its economic interests, said David Mathieson, an independent Myanmar-focused analyst. 'China's pressure is a more general approach to calming down the conflict.' (Story continues below) Defying Beijing The battle for Bhamo began soon after the KIA wrested control of the main rare-earths belt in Kachin last October. After its takeover, the KIA raised taxes on miners and throttled production of dysprosium and terbium, sending prices of the latter skyrocketing. Supply has been squeezed, with Beijing importing 12,944 tonnes of rare-earth oxides and metals from Myanmar in the first five months of 2025, according to Chinese customs data. That is down by half from the same period last year, though exports rose more than 20% between April and May. The KIA, which analysts estimate has over 15,000 personnel, was founded in 1961 to fight for the autonomy of Myanmar's Kachin minority. Battle-hardened through decades of combat and funded by a combination of local taxation and natural resources, it is among the strongest of Myanmar's rebel groups. The militia is confident of its ability to seize Bhamo and believes Beijing won't ultimately carry out its threat to stop exports due to its thirst for the minerals, two of the people said. Myanmar has been in crisis since the military overthrew a democratically elected government in 2021, violently quashing protests and sparking a nationwide armed rebellion. Swathes of territory were subsequently seized by anti-junta forces, but the rebels have come under Chinese pressure to make concessions to the military. Beijing has also sent jets and drones to the junta, which is increasingly reliant on airpower, according to the US-based Stimson Centre think-tank. China, which has major investments in Myanmar, last year brokered a ceasefire for the junta to return to Lashio, a northeastern town housing a regional military command. More than 200km to the north, about 5,000 KIA and allied personnel have been involved in the offensive for Bhamo, according to a KIA commander with direct knowledge of the fighting. Losing Bhamo would cut off the military's land and river access to parts of Kachin and neighbouring region, isolating its troops housed at military bases there and weakening its control over northern trade routes, according to Maj Naung Yoe, who defected from the junta after the coup. The junta spokesperson's office told Reuters that China may have held talks with the KIA, but it did not respond to a question about whether it had asked Beijing to threaten a blockade. 'China may have been exerted pressure and offered incentives to the KIA,' it said in a statement. Beijing first advised the rebels to pull back from Bhamo during negotiations in early December, according to the KIA official. Instead of withdrawing from Bhamo after those talks, the KIA doubled down, according to the commander and the official. The International Institute for Strategic Studies said in a May briefing that the battle for Bhamo had cost the KIA significant resources and hundreds of casualties. Beijing became more confrontational during further discussions that took place in spring, when its representatives threatened to stop rare-earth purchases, the official said. A disruption in the movement of heavy rare earths from Kachin could lead to a deficit in the global market by the end of the year, said Neha Mukherjee of the UK-based consultancy Benchmark Mineral Intelligence. Supplies of the critical minerals outside China were already constrained, she said: 'In the short term, during the brief disruption period, prices outside of China could shoot up higher.' Battle for Bhamo The KIA has pushed junta troops into a handful of isolated pockets, according to the commander. But the junta retains air superiority and has devastated large parts of Bhamo with relentless airstrikes, according to the KIA official, the commander and a former resident of the town. The junta spokesperson's office said it was permitted to strike such sites because the KIA had been using them for military purposes, though it did not provide evidence. Nathan Ruser, an analyst at the Australian Strategic Policy Institute, who has reviewed satellite imagery of Bhamo, said much of the damage across the town appeared to be from airstrikes. Airstrikes have killed civilians including children and destroyed schools and places of worship, according to Khon Ja, a Kachin activist from Bhamo who said her home had been bombed. 'I don't know for how long that the revolutionary groups will be able to resist Chinese pressure,' she said, adding that existing border restrictions had led to shortages of petrol and medicine in Kachin. Despite the obstacles, KIA leaders believe capturing Bhamo would shift momentum in their favour and strengthen public support. If the ethnic army were to take control of the entire state, then Beijing would have no option but to negotiate and sideline the junta, the commander and the official said.
Bangkok Post
7 hours ago
- Bangkok Post
Thai exports face ‘severe harm' if high tariff sticks
Thai exports could contract in the second half of this year if the United States imposes a 36% tariff rate starting next month, business leaders said on Tuesday. Starting on Aug 1, Washington plans to impose a 36% tariff on all Thai products, separate from sectoral tariffs, according to a letter signed by President Donald Trump and issued on Monday. Finance Minister Pichai Chunvajira said the letter was sent before US officials had seen a revised proposal from Thailand, and he expressed optimism that Thai negotiators could get the tariff rate reduced. Dhanakorn Kasetrsuwan, chairman of the Thai National Shippers' Council, said a 36% tariff could severely harm Thailand's export market, particularly as nations such as Vietnam (20%) and Malaysia (25%) currently have significantly lower rates. This could diminish Thailand's competitiveness, leading to a shift in orders to those countries, he said. Moreover, high tariffs could deter foreign investment, with potential investors opting for locations such as Vietnam or Malaysia due to unfavourable tariff conditions in Thailand, said Mr Dhanakorn. He urged the government to study Vietnam's approach, which quickly led to an agreement with Washington, in part by agreeing to eliminate tariffs for all US products as Hanoi did. Mr Dhanakorn said the government must develop a model that equally engages both China and the US, while exploring the possibility of offering zero tariffs on US products. 'A 36% tariff will definitely affect Thai exports, potentially causing them to contract in the latter half of the year. The severity of the downturn will depend on how much higher Thailand's tariffs are compared with those of competitors,' he said. Mr Dhanakorn said the speed at which competitors can replace Thai export orders to the US will be another important factor. The United States accounts for more than 18% of all Thai exports by value. The government must weigh the long-term impact on Thai exports, looking beyond the immediate effect on orders, he said. Poj Aramwattananont, chairman of the Thai Chamber of Commerce and the Thai Board of Trade, said Thailand's negotiating team should promptly revise its proposals for US review, as the tariff enforcement has now been postponed to Aug 1. The government is planning a meeting on Wednesday on tariffs with the Joint Standing Committee on Commerce, Industry and Banking, according to Mr Poj. Commerce Minister Jatuporn Buruspat said the ministry would have discussions with related industries to evaluate the impacts and plan appropriate countermeasures. 'The export structure will inevitably change regardless of the tariff rates,' he said. 'We will explore various strategic models, including the possibility of reducing tariffs on US products to zero.' Team Thailand and relevant ministers have a meeting planned at Phitsanulok Mansion on Friday for further discussions.
Bangkok Post
9 hours ago
- Bangkok Post
Thai pig farmers raise alarm about possible US imports
Thailand's pig farmers have warned the government against opening the pork market as a trade concession to secure tariff reductions from the United States, adding that even imports for animal feed production pose significant risks. With the US announcing a 36% import tariff on Thai goods effective from Aug 1, renewed negotiations are inevitable, said Sittiphan Thanakiatpinyo, president of the The Swine Raisers Association of Thailand. However, he stressed that any government concession allowing US pork, parts and offal imports would devastate domestic pig farmers and the entire supply chain. The association highlighted the vast production cost differential, warning that cheap US pork imports would collapse the domestic market and force local farmers into bankruptcy. Mr Sittiphan emphasised that pork should not serve as a negotiating tool in international trade discussions, given its high production costs, low profit margins and direct connection to national food security. The association raised concerns about potential disease outbreaks, particularly swine flu, which has never been detected in Thailand. Opening imports could compromise the country's internationally recognised livestock disease prevention standards. A critical health issue involves Beta-agonist growth promoters, permitted in US pork production but strictly banned in Thailand. Despite claims of safety, these substances can cause rapid heartbeat, hypertension, headaches and tremors in humans when consumed in large quantities. Scientific reports indicate these compounds accumulate more in organs than muscle tissue, creating risks even if used for animal feed production due to potential market leakage. The association called on the government to reconsider negotiation strategies, abandoning plans to open vulnerable agricultural markets and instead focusing on competitive industrial products to maintain grassroots economic stability, promote food safety and ensure long-term food security.
