Malaysia’s AI Development Faces Uncertainty Amid US Policy Changes

PETALING JAYA: The future of artificial intelligence (AI) chip exports from the United States and their potential impact on Malaysia remains unclear, as analysts provide various perspectives on the situation, according to the National AI Office (NAIO).

A spokesperson for NAIO stated that many details regarding the upcoming US restrictions are still vague, particularly concerning the so-called "US standards," which have not been thoroughly defined.

The spokesperson emphasized the need for careful evaluation of these restrictions by the Malaysian government.

"Despite this uncertainty, Malaysia is committed to exploring all available opportunities in AI, as outlined in our national roadmap for technological development," the spokesperson added. "It is important to remember that the United States is a crucial strategic ally for Malaysia, and our relationship is strong and cooperative."

In recent news, reports emerged indicating that US President Joe Biden plans to impose restrictions on the export of AI chips to curb the use of advanced technologies by adversarial nations.

This policy initiative consists of three tiers of export limits. The first tier allows 18 allied nations direct access to US-made chips while implementing certain restrictions, such as limits on computing power for other countries.

Malaysia falls under the second-tier category, where it will face a cap on computing power at about 50,000 graphics processing units from the years 2025 to 2027.

To bypass these limitations, companies in second-tier countries could potentially acquire a validated end-user designation if they adhere to US security and human rights standards, which cover essential areas like physical safety and cyber protocols.

The third tier of restrictions will completely prohibit certain countries, including China and those under a US arms embargo, from receiving US chip exports.

Experts warn that if these restrictions are applied, the Malaysian technology sector may struggle significantly. Dr. Arumugam G. Sithamparam, a senior lecturer at the Asia-Pacific University of Technology and Innovation, pointed out that the upcoming restrictions could impede data centers from efficiently handling advanced AI workloads and maintaining 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 measures could hinder Malaysia's ambitions to establish itself as a leader in the global semiconductor and data center industries.

"By meeting US security and human rights standards, Malaysia might improve its position within the semiconductor supply chain and strengthen ties with key US technology firms," he noted.

He also mentioned that in today's rapidly changing global environment, Malaysia must tread carefully through these export limitations to harmonize its economic goals with adherence to US regulations, especially with the recent surge in data center investments in the country.

AI, Export, Malaysia