Malaysia leans toward Huawei chips for sovereign AI, defying US warnings
Malaysia is evaluating Huawei's Ascend 910C chips for a €450M (RM2B) sovereign AI project, per Bloomberg. If finalized, it would be the first government to choose Chinese over American AI accelerators, despite US warnings of export violations. The move reflects Kuala Lumpur's desire for data sovereignty and challenges Washington's efforts to control global AI infrastructure.
Bottom line — Malaysia's decision could test US leverage over allies in the AI chip race, with officials set to visit Washington this month.
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- The project aims to keep sensitive government, military, and intelligence data within Malaysia, per people familiar with the matter. Prime Minister Anwar Ibrahim has criticised the US Cloud Act, which allows American courts to compel data from US companies even when stored overseas, calling it 'not reasonable'.
- State-linked Telekom Malaysia, which already partners with Huawei, was selected as the key operator after a public tender, according to the sources. Some on Trump's team are frustrated that American firms like Nvidia and AMD had insufficient opportunity to compete.
- Huawei's chips still trail Nvidia's by a wide margin, but the Shenzhen-based company is seeking a foothold in data centre markets from Southeast Asia to the Middle East, Bloomberg reports. Huawei is also vying for an AI data centre contract in Egypt, prompting a US counterbid.
- Washington has explicitly warned that using Ascend 910C chips could violate US export regulations. A State Department spokesperson said 'untrusted suppliers can be manipulated, disrupted or controlled by authoritarian regimes', without naming China or Huawei.
- Malaysia has one of the world's fastest-growing AI data centre ecosystems, largely driven by American firms like Nvidia, Microsoft, and Oracle, per the articles. The US is working on a programme to offer AI hardware and software packages to the Global South with possible government financing.
- This is not the first such attempt: in May 2025, Malaysia's deputy communications minister announced a plan to use 3,000 Huawei Ascend chips, only to retract it after US pressure. The investment ministry then called it a private project, while reaffirming Malaysia's 'sovereign right' to set its own policies.
- Officials from Malaysia's national security council are scheduled to travel to Washington later this month to discuss the issue, the sources said. Anwar's government is also considering a separate tender that would allow Nvidia to compete more directly for the sovereign AI contract.