US pressures Malaysia to stop banned AI chips potentially entering China by monitoring ‘every shipment that comes to Malaysia when it involves Nvidia chips’

The United States has come into 2025 swinging when it comes to foreign imports around technology. Not only has the Trump administration implemented new tariffs that have caused Japanese companies to stockpile on US soil, but has also talked about killing the CHIPs act entirely. Now it seems the US has turned its attention to Malaysia, over concern for tech shipments being redirected from there to China, further bolstering the country’s AI development.

Reuters reports that regulations around semiconductors in Malaysia are about to be tightened due to US interest. The Financial Times spoke to Trade Minister Zafrul Aziz, who said Malaysia would have to closely track the movement of high-end Nvidia chips at the behest of the United States government.

“[The US is] asking us to make sure that we monitor every shipment that comes to Malaysia when it involves Nvidia chips,” Aziz told the newspaper. “They want us to make sure that servers end up in the data centres that they’re supposed to and not suddenly move to another ship.”

It might feel a little out of no where, but Malaysia is currently investigating a Singapore fraud case which may involve a shipment of servers that might have had advanced chips subject to US import laws. The case involves transactions worth $390 million and the local media has linked the case with Chinese-based AI firm DeepSeek.

Whether or not the cases are actually linked is still up in the air, but regardless of facts, this grab for control and further crackdowns by the United States is unsurprising. Everyone is worried about the future of AI technology, and the US has appeared especially reactionary with tech tariffs that saw Nvidia loose $200 billion in valuation in a single day.

With crucial hardware, such as graphics cards, already seeming impossible to get, stricter trade rules alongside these tariffs spell bad news for PC gamers. The largest lobbying group for gamers in the US has already come out and said the tariffs will negatively impact millions of Americans, while manufacturers like Acer and ASRock have already admitted they’re going to raise their prices in response.

With greater fear around China’s potential misuse of tech, things are likely to get worse before they get better. If we do see Trump’s proposed 100% tax on silicon from Taiwan, we might all end up dreaming of the sky-high prices we currently face.