THE CRUNCH
Malaysian customs have seized 30 server units carrying AI chips worth $12.11 million from Kuala Lumpur International Airport, after they were falsely declared as electronic components. The servers, seized on October 15, had come from one undisclosed Asian country and were bound for another, a route that should have required a trade permit. Airport customs director Aspalila Ag Tuah said the false declaration was meant to ensure no restrictions were imposed while the servers were exported to their next destination.
A Malaysian firm that facilitated the shipment is assisting the investigation, though authorities suspect the operation extends beyond it. Aspalila said the attempt is thought to be connected to at least five other similar cases involving nearly $25 million worth of chips in total, including a June seizure of $13 million worth of chips also falsely declared as computer components. All are suspected to have been carried out by the same syndicate, though officials did not share further details while the investigation continues.
The seizure fits a broader pattern. The US has restricted AI chip exports to a number of destinations since at least the Biden administration, and Malaysia has faced pressure to monitor shipments involving Nvidia chips that could be routed to China. Singaporean authorities arrested three men over a separate smuggling attempt last year, and Taiwanese authorities detained an Nvidia employee over an alleged attempt earlier this year. Separately, more than $100 million worth of AI data centre freight has reportedly been stolen within the US since June, underlining how demand for this hardware is drawing criminal activity.