Malaysia's AI Plans Face Uncertainty Amid US Policy Changes

PETALING JAYA: The impact of potential restrictions on artificial intelligence (AI) chip exports from the United States remains unclear according to various analysts, as stated by the National AI Office (NAIO).

A spokesperson for the NAIO mentioned that many details, including the specific "US standards" referenced in the discussions, are still vague. He emphasized that the Malaysian government needs to carefully analyze the particulars of any proposed export barriers.

Despite these uncertainties, Malaysia is actively seeking opportunities in the AI sector in line with its national roadmap. The spokesperson also acknowledged that the United States is a crucial strategic partner for Malaysia, highlighting the strong relationship between the two nations.

The NAIO intends to maintain close collaboration with US counterparts and local offices to address any concerns raised by the potential export restrictions.

Recent reports have surfaced regarding President Joe Biden's intentions to impose restrictions on AI chip exports. This move is part of broader efforts aimed at preventing advanced technologies from being utilized by adversaries.

The proposed export restrictions would involve a tiered system. The first tier allows full access to US-made chips for 18 allied nations while introducing new limits on other countries, such as caps on computing power.

Countries classified under Tier Two, which includes Malaysia and many others, will face a limit of roughly 50,000 graphics processing units (GPUs) from 2025 to 2027. Companies from these nations may circumvent these restrictions by obtaining a validated end-user designation, contingent on meeting US security standards that cover physical, cyber, and personnel aspects as well as human rights.

Meanwhile, Tier Three countries, which include China and any nation under a US arms embargo, will be entirely prohibited from receiving US chip exports.

Experts warn that if implemented, these restrictions could significantly challenge the Malaysian tech industry. Dr. Arumugam G. Sithamparam, a senior lecturer at the Asia-Pacific University of Technology and Innovation, expressed concerns that such limitations might hinder the ability of data centers in Malaysia to support advanced AI workloads and maintain their competitive standing.

Dr. Arumugam, who also serves as a referral expert to the 15th Parliamentary Special Select Committee on Finance and Economy, stated that these restrictions could hinder Malaysia's ambitions to be a leader in the global semiconductor and data center sectors.

“Complying with US security and human rights standards could present Malaysia with opportunities to elevate its position within the semiconductor supply chain and build closer ties with prominent US tech firms," he explained. "However, in this rapidly evolving global environment, Malaysia must tread carefully as it seeks to balance its economic goals with compliance to US mandates.”

He pointed to the noticeable uptick in data center investments in Malaysia, indicating a growing interest in this area despite the looming uncertainties.

Malaysia, AI, US