Chinese companies' new trick exposed: training AI in other countries

After the US government banned the export of advanced chips to China, Chinese companies have been researching artificial intelligence technology in data centers in Malaysia. The Malaysian government has now launched an investigation into the matter.

According to an investigation by the Wall Street Journal, to circumvent the US government’s restrictions, some Chinese engineers began to send hard drives with data to Malaysia in March this year and build artificial intelligence models in data centers equipped with advanced Nvidia chips. They planned to use this method to train artificial intelligence models back to China.

Malaysia’s Ministry of Investment, Trade and Industry said in a statement on June 19 that it was investigating the matter with relevant authorities to determine whether there was indeed any illegal activity.

The ministry indicated that it would align with the US on this issue, adding that the use of Nvidia chips and artificial intelligence servers is not restricted under Malaysian law, but that it is willing to cooperate with any government on trade in sensitive products subject to export controls.

The US Commerce Department announced in October that it would impose stricter restrictions on the export of advanced chips to China, including Nvidia’s H100 and A100 series chips. The US government also took a tougher decision in April this year, banning Nvidia from exporting artificial intelligence chips to China.

Malaysia has become an important data center in Southeast Asia and has attracted many technology companies in recent years. Chinese companies have tried to circumvent US restrictions by taking advantage of various loopholes.