US Should Help Malaysia Stop Chip Smuggling, Senator Says
Sen. Tom Cotton, R-Ark., urged the Commerce Department on Oct. 30 to support Malaysia’s new efforts to prevent the country from being used to smuggle export-controlled U.S. chips to China.
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In a letter to Commerce Secretary Howard Lutnick, Cotton suggested helping Malaysia build "robust" screening tools for foreign investment and beneficial ownership information to determine whether new data center entities in the country involve China.
Cotton also said Commerce should consider working with industry to implement software-based anti-diversion mechanisms on advanced chips sent to Malaysia. Priority customs clearance procedures could be developed for such chips, he added.
“Malaysia provides an excellent opportunity to test novel anti-diversion strategies, giving the U.S. government and companies a chance to iron out implementation details,” Cotton wrote. He noted that the White House's AI action plan, released in July, calls for the government and industry to “explore leveraging new and existing location verification features on advanced AI compute to ensure that the chips are not in countries of concern” (see 2507230028).
Commerce didn't respond to a request for comment on Cotton's letter. But a former Bureau of Industry and Security official said in August that Malaysia’s new export controls could persuade the U.S. to loosen AI chip restrictions on the country (see 2508120033).
Cotton and Rep. Bill Huizenga, R-Mich., introduced a bill in May that would require export-controlled advanced chips to contain location-verification mechanisms (see 2505090015, 2505150035 and 2507080001). However, some technology policy experts have argued that a chip location mandate would be difficult to implement (see 2507170040).