Nvidia, Other US Origin AI Chips Shipments To China Will Now Require Trade Permits, Says Malaysia, Rule Violators To Face Strict Action

On Monday, Malaysia’s Ministry of Investment, Trade and Industry announced that any export, transshipment, or transit of high-performance artificial intelligence chips of U.S. origin will now require a government-issued trade permit, effective immediately.

What Happened: The ministry said companies must notify authorities at least 30 days in advance if moving such items, even if they are not listed on Malaysia's current strategic goods registry, reported Reuters.

"Malaysia stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual or company," the ministry said in a statement, adding that violators will face strict legal action.

The move aims to close regulatory loopholes while officials consider adding high-performance AI chips to Malaysia's list of strategic items.

Why It's Important: The announcement follows U.S. pressure to stop the flow of restricted chips—especially from Nvidia Corporation NVDA—to China, amid mounting concerns over their use in advanced AI development and military applications.

In March, Malaysia's Trade Minister Tengku Zafrul Aziz said the country would take "necessary action" if domestic firms were involved in allegedly fraudulent Nvidia chip transshipments via Singapore.

Earlier this month, it was reported that the U.S. government is considering new export restrictions on AI chips, including Nvidia's, to Malaysia and Thailand to prevent China from obtaining them through intermediaries.

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Meanwhile, Nvidia CEO Jensen Huang is reportedly planning a diplomatic visit to China, where the company aims to launch a scaled-down version of its AI chip, modified to meet U.S. export rules.

The new chip, based on the Blackwell RTX Pro 6000 but without advanced features, could be unveiled as soon as September.

Benzinga's Edge Stock Rankings show that Nvidia maintains solid upward momentum across short, medium and long-term periods. More detailed performance information is available here.