Malaysia seizes $13 million worth of AI chips at Kuala Lumpur airport

Malaysian customs authorities have seized advanced artificial intelligence chips worth 52.9 million ringgit (about $12.93 million) in a smuggling attempt at Kuala Lumpur International Airport.

The customs department said the seizure was made on June 5 after officers inspected a shipment in the airport's free trade zone and found 72 server units containing advanced AI chips.

Kuala Lumpur Airport customs director Zulkifli Muhammad said initial investigations showed the servers were intended for re-export to another Asian country, a transaction that requires approval under Malaysia's Strategic Trade Act.

Authorities alleged the shipment had been falsely declared as "computer components" to evade export controls, with Malaysia being used as a transit point to bypass restrictions before the goods reached their final destination.

The servers have been confiscated, and a Malaysian company that facilitated the shipment has been called in to assist with the investigation. Officials declined to identify the destination country, citing the ongoing probe.

Malaysia introduced export controls last year on high-performance chips of US origin following pressure from Washington to curb the movement of advanced semiconductors to China for artificial intelligence development.

Last year, Malaysian authorities also investigated reports that a Chinese company operating in the country was using servers equipped with Nvidia chips for AI development, but said they found no evidence of illegal semiconductor trade.

In a separate enforcement action, customs officials said they seized 4,760 cartridges of vape liquid worth 1.19 million ringgit on June 10.

The cartridges were concealed inside central processing unit casings and were intended for export to a neighbouring country. Laboratory checks found the vape liquid contained methamphetamine, customs officials said.

Investigations into both cases are ongoing.