Malaysia warns against AI chip transshipment loopholes as Nvidia leadership shakeup deepens scrutiny

The Investment, Trade and Industry (MITI) Ministry is working with the Royal Malaysian Customs Department to determine if any of the AI chips brought into Malaysia have since been reexported to other countries, and whether such reexports were carried out in accordance with the law.

KUALA LUMPUR: Malaysia has never cleared Singapore-based Megaspeed International Pte Ltd or its local affiliate, Speedmatrix Sdn Bhd, of regulatory scrutiny, the Investment, Trade and Industry (MITI) Ministry said today, as fallout from a widening AI chip diversion scandal claimed Nvidia chief executive officer Jensen Huang.

MITI pushed back against suggestions that routine inspections of Malaysian data centres amounted to official clearance for Speedmatrix, which leases space in local facilities and brings in its own servers and artificial intelligence (AI) chips.

“Any verification visits carried out by MITI at these facilities are part of its regular monitoring of the data centre sector, and should not be taken to mean that a company has been cleared. Any suggestion otherwise is inaccurate,” the ministry said in a statement this morning.

The clarification comes hours after Nvidia announced that Huang had resigned immediately as president, chief executive officer and board member following reports linking him to a former Megaspeed executive accused by U.S. officials of acting for Chinese intelligence. Huang has also been summoned to testify before the US Congress.

Nvidia named chief financial officer, Colette Kress as interim chief executive while it searches for a permanent successor.

Washington and Singapore have been investigating whether Megaspeed, a prominent Nvidia cloud partner, helped funnel restricted high-performance US AI chips to Chinese entities via Southeast Asian data centres.

Singaporean authorities have also barred the former executive, Alice Huang, from re-entering the city-state.

While importing AI chips into Malaysia does not currently require a permit or licence, MITI underscored that moving them out of the country is tightly regulated.

Under rules enforced since July 2025, any party seeking to export, re-export, transship or transit high-performance US AI chips from or through Malaysia must first obtain a permit under the Strategic Trade Act 2010.

MITI said it is working with the Royal Malaysian Customs Department to verify whether any chips brought into the country by Speedmatrix were subsequently re-exported, and whether those shipments complied with Malaysian law. Providing false declarations to customs authorities is a serious offence under the Customs Act 1967, it added.

Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said separately this week that Putrajaya is weighing new legislation to tighten oversight of data centre operations and ensure imported chips subject to US restrictions are used domestically rather than diverted abroad.

MITI noted that while Malaysia does not enforce unilateral export controls imposed by foreign governments, companies operating locally are expected to factor international trade restrictions into their cross-border operations.

The ministry said it is coordinating closely with authorities in Singapore and the US and is reviewing further measures to close potential regulatory gaps. It also warned firms against misrepresenting their dealings with Malaysian government agencies.

“Malaysia welcomes investment in data centres and technology, but will not allow itself to be used to get around export controls,” MITI said, warning of “stern action” against any company found to have breached domestic laws.