KUALA LUMPUR – Malaysia’s ambition to become a global data centre hub might face a stumbling block due to the latest directive from the administration of the outgoing US President Joe Biden, which imposed another round of restrictions on the export of artificial intelligence (AI) chips from tech companies like Nvidia Corp.
According to Bloomberg, the US wants to curb the sale of AI chips used in data centres on a country and company basis with the goal of concentrating AI development in friendly nations and getting businesses around the world to align with American standards.
The directive would result in restricting the expansion of semiconductor trade to most of the world, which is an attempt to control the spread of AI technology at a time of soaring global demand.
The news report, which quoted anonymous sources, said the directive would create three tiers of chip curbs.
At the top level or Tier 1, a small number of US ally nations would enjoy essentially unmitigated access to American chips. These countries are Australia, Japan, Taiwan and members of the European Union.
The vast majority of the world is placed under Tier 2 and would face limits on the total computing power that can go to one country.
Meanwhile, Tier 3 is a group of nations that are adversarial to the US and would be effectively blocked from importing the semiconductors. Among the countries listed are China, Russia, Myanmar, and Iran.
Tech-based portal TechNave reported that Malaysia is included in the second tier which would be imposed a maximum amount of limited data centre power – together with other Southeast Asian and Middle Eastern countries.
This group would get unlimited access if they agreed to a set of security requirements and human rights standards set by the US government, according to a source.
Nvidia has since criticised the reported move by the Biden administration, as the firm said that the outgoing president should not “preempt incoming President Trump” by enacting such a last-minute policy.
“We would encourage President Biden to not preempt incoming President Trump by enacting a policy that will only harm the US economy, set America back, and play into the hands of US adversaries,” Nvidia vice-president Ned Finkle was quoted as saying by Reuters. – January 12, 2025