Ever since the U.S. government restricted sales of advanced AI and HPC processors to China, Chinese entities have used various loopholes to acquire Nvidia's GPUs. Smuggling GPUs from nearby countries to China was one of the easiest ways to get the desired processors, but it looks like it is not going to be that easy anymore: Singapore is cracking down on at least some smugglers, and now Malaysia is tightening oversight of its high-tech exports to China.

Malaysia is reportedly preparing stricter rules for its high-tech sector due to U.S. concerns that advanced processors are being funneled to China, violating American export laws. The United States has asked Malaysia to carefully follow the path of high-performance Nvidia processors entering the country. U.S. officials suspect that many of these chips are being routed to China, bypassing export limits meant to curb Chinese progress in AI and military capabilities. Malaysia formed a task force to tighten oversight.