Malaysia says it foiled $12m AI chip smuggling bid

Malaysian customs officials said Wednesday they had foiled an attempt to smuggle advanced artificial intelligence chips through Kuala Lumpur airport in a case worth 49.5 million ringgit, or $12.1 million.

Airport customs director Aspalila Ag Tuah said a team inspected the airport's free trade zone this month and seized 30 server units containing advanced AI chips.

Aspalila said the servers were declared as electronic components to avoid detection and initial investigations found they were to be re-exported to another country in Asia. She said the shipment came from an Asian country, but did not identify the exact origin, where the chips were made or the intended destination.

Customs officials said it was the fifth case this year involving a syndicate smuggling advanced AI chips, with the combined estimated value exceeding $24 million.

Malaysia tightened export and transshipment controls on chips from the United States last year, requiring a strategic trade permit and advance notification if there is suspicion of misuse or diversion.