US blocks AI chip access to China, warning sign for Thailand, Malaysia

The move aims to prevent these chips from being rerouted to China, raising concerns among businesses and industries in the region, particularly over data centre investments and AI deployment, both of which rely heavily on advanced chips.

Kriangkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said the latest US actions stem from an ongoing trade war that began under President Donald Trump 1.0 and has continued into the administration of President Joe Biden.

He noted that the core objective of the US export restrictions is to block the transfer of advanced technologies and high-performance chips to adversarial nations, such as North Korea, Iran and especially China. 

Washington’s Chips and Science Act was introduced specifically to support this goal, and these measures have intensified under the “Make America Great Again” doctrine.

The latest clampdown reportedly follows heightened scrutiny by US authorities into how China-based open-source AI platforms — such as DeepSeek — continue to operate using Nvidia chips, despite the ban. 

Investigations suggested that the chips may have leaked through third countries that originally imported them from the US.

“The US knows that Thailand and Malaysia import a large volume of advanced technologies, which is why additional monitoring and controls have been introduced,” Kriangkrai said. “This is similar to US efforts to curb transhipment and tariff circumvention. But in this case, the focus is on export controls directly from the US.”

Kriangkrai added that the proposed US restrictions would not affect data centre operations, as they are unrelated to the transhipment issue. Even large-scale IT investments, including Amazon Web Services (AWS), which has committed hundreds of billions of baht to long-term data infrastructure in Thailand, remain unaffected.

“As long as imported chips are genuinely used domestically, there is no problem. The issue arises only when imports are used as a pass-through for other destinations,” he said.

He emphasised that the United States has the capability to detect such practices and is enforcing these measures with increased rigour, both on imports and exports. “Trump 2.0’s policy is more aggressive and aims to close every loophole that has long been exploited,” Kriangkrai noted.

Matrix Choong, General Manager of Advantech Corporation (Thailand) and Regional Business Manager for the Service Industry Group, echoed these concerns. He explained that the root of the problem lies in the US discovery of high-end AI chips leaking from certain ASEAN countries into China, prompting Washington to draft preventive measures and potentially formal legislation.

Regardless of whether the US ultimately imposes the AI chip export ban in the form of policy upgrades or enforceable law, Choong said the probability of such action is high.

He warned that the consequences could include a shortage of AI-capable chips in both Thailand and Malaysia — unless the two countries agree to introduce strict conditions and safeguards against technology leakage. 

This would require establishing comprehensive regulatory frameworks and national policies to convince the US that AI chips can continue to be safely exported for domestic use in both nations.

If the restrictions are formally enacted, their immediate impact may still be limited. This is because the United States prohibits the establishment of data centres abroad that exceed the size of those built in the US. For instance, Taiwan has developed an AI super centre for domestic use, but it remains smaller in scale than its US counterparts.

Similarly, any AI-focused data centre projects in Thailand would likely be modest in size, as Nvidia is currently constrained by limited manufacturing capacity. As a result, the company must prioritise chip allocation to high-demand clients, most of whom are based in the United States.

Given these constraints, investors planning AI-related infrastructure in Thailand will inevitably need to take into account the potential challenges in procuring AI or high-end chips from US suppliers in the future.

Jareeporn Jarukornsakul, Chairman and Group CEO of WHA Corporation PCL, assured that WHA clients would not be affected by the US export control concerns, as they are end users — meaning they utilise the chips themselves rather than re-export or resell them.

“When establishing a data centre, multiple technical factors are considered. Orders are placed according to precise specifications for genuine use in data centres — not for resale or transhipment,” she said, noting that some of the orders are even placed by US companies operating in Thailand.

Narit Therdsteerasukdi, Secretary-General of the Board of Investment (BOI), also weighed in, saying that discussions with relevant stakeholders revealed the US draft framework still lacks clarity. For example, it is not yet clear whether the restrictions will apply only to Chinese-owned data centres in Thailand or extend to facilities owned by investors from other nations.

Moreover, the exact chip models subject to export controls have yet to be specified. “Not all chips fall under the scope of these measures, so it's currently difficult to assess the full extent of the risks or impacts,” he said.