US aims to stop Nvidia chip smuggling to China

The U.S. government is stepping up efforts to prevent Nvidia chips from being smuggled into China through Malaysia.

Officials suspect advanced semiconductors are still reaching China despite export controls. Malaysian Trade Minister Zafrul Aziz told the Financial Times that U.S. officials are demanding strict monitoring of all high-end Nvidia chip shipments to Malaysia.

The country is now creating a task force to tighten regulations around its booming data center industry. Malaysia has emerged as one of the fastest-growing markets for data centers, attracting over $25 billion in investments during the past 18 months.

This rapid growth has apparently caught the attention of U.S. regulators concerned about potential circumvention of export restrictions. The concerns appear warranted - authorities in Singapore recently arrested nine people allegedly involved in fraudulent sales of Nvidia chip-equipped servers.