MIDF Amanah Investment Bank Bhd has affirmed that Malaysia’s data centre industry will not be impacted by the Ministry of Investment, Trade and Industry’s (MITI) latest directive concerning US-origin artificial intelligence (AI) chips.
In a research note issued Tuesday, the bank explained that the directive—requiring a Strategic Trade Permit (STP) for all exports, transshipments, and transits of high-performance US-made AI chips—does not apply to chips imported for domestic use within data centres.
“There is zero impact from this directive in our opinion, as far as data centres in Malaysia are concerned,” the note stated. “This is not an additional red tape that could delay the process of setting up a data centre in Malaysia.”
MIDF added that unless operators plan to move the chips out of Malaysia, the directive has no bearing on local deployment. It also emphasised that many newly built data centres are AI-ready, although not all may be used for AI computing immediately.
The bank interpreted the move as a strategic measure by MITI to prevent the smuggling of advanced AI chips to China via third-party intermediaries.
“This shows Malaysia’s willingness to take responsibility for the movement of US-origin AI chips out of the country by stepping up its enforcement,” it said.
According to MIDF, the directive aligns with ongoing discussions between Malaysia and the United States, likely focused on regulatory enforcement, end-user tracking, and serious compliance with export controls.
“MITI’s latest directive covers all these. It is hoped that this will be able to placate the US when negotiating the restrictions of AI chip exports under Trump’s refashioned AI Diffusion Rule,” the bank noted.
MIDF also pointed to speculation that the current US export control framework could shift from a tiered country classification to a licensing system based on government-to-government agreements. Such a change could benefit Malaysia, potentially removing current limits such as the seven per cent AI computing power cap for countries outside Tier 1.
“Regardless of the changes from Biden’s rescinded Framework of AI Diffusion to the new rule being rewritten by the Trump administration, MIDF believes the essence remains, which is to contain China’s AI advancement and ensure that US AI chips are not used to train Chinese AI models,” the note concluded. - July 15, 2025
