Malaysia seizes $12.1M of AI chips at Kuala Lumpur airport

Malaysian customs officers have seized 30 servers containing advanced AI chips at Kuala Lumpur International Airport (KLIA), the authorities said on Wednesday.

The shipment was worth about RM49.5m ($12.1m), and it was moving through Malaysia without the required permit.

Officers found the servers on 15 October in a warehouse in the airport’s free trade zone. KLIA customs director Aspalila Ag Tuah gave the details at a press conference, Malay Mail and Reuters reported.

The shipment had been declared under a single air waybill as electronic components, a label officials say was meant to avoid detection.

The servers came from an unnamed Asian country and were due to be sent on to another Asian country. According to investigators, the group behind the shipment used Malaysia as a transit point to get around export restrictions.

This is the fifth case linked to the same suspected syndicate this year, and the combined value of the five seizures is more than RM100m. In June, customs announced a similar $13m seizure of 72 AI servers at the same airport.

No arrests have been made so far. However, the companies that handled the shipments have been called in to help the investigation.

Officials did not name the chip brands, where the chips were made or where they were going, citing the ongoing investigation. The chips could potentially be used to develop military technology, the authorities said.

Malaysia’s trade ministry (MITI) treats high-performance AI chips as dual-use items, meaning they have both civilian and military uses.

Since last year, a permit has been needed to export or move them through the country, and companies must apply 30 days before the chips arrive.

The cases are being investigated under the Strategic Trade Act 2010. Companies found guilty face fines of up to RM20m, while individuals face fines of up to RM10m, up to 10 years in prison, or both.

The seizure comes as the US tightens checks on how advanced chips reach China through other countries. Nvidia, for example, has cut its list of approved buyers in Asia as part of a wider crackdown.