AI chips worth $12.1 million seized at Malaysia airport, customs authority says

KUALA LUMPUR, Oct 28 (Reuters) – Malaysian customs said on Wednesday that it had seized about 49.5 million ringgit ($12.11 million) worth of advanced artificial intelligence chips this month, as authorities close in on a syndicate suspected of smuggling high-performance semiconductors through the country’s main airport.

* Malaysia imposed export controls last year on the movement of advanced AI chips of US origin, following pressure from the United States to stem their flow into China

* On October 15, authorities found 30 server units containing advanced AI chips during an inspection at Kuala Lumpur International Airport’s free trade zone, the airport’s customs director Aspalila Ag Tuah told reporters

* Initial investigations found that the shipment, originating from an Asian country, was to be re-exported to another nation in the continent, a move that required a trade permit, she said

* “The servers were falsely declared as electronic components… and shipped through Malaysia to ensure there would be no restrictions imposed while being exported to the next destination,” Aspalila said

* A Malaysian firm that facilitated the shipment has been called in to assist investigations, he added

* The shipment was suspected to have been carried out by a network responsible for a similar smuggling attempt foiled by customs authorities in June, she said

* At least five cases were linked to the syndicate, involving seizures of chips worth more than 100 million ringgit in total, she said, declining to divulge further details citing an ongoing probe

(Reporting by Rozanna Latiff; Editing by David Stanway)