Key
Takeaways
- Malaysia’s flip-flop on
Huawei’s AI servers highlights rising US-China tensions in tech.
- The US warns against using
Huawei’s Ascend chips globally, citing export control risks.
- Southeast Asia is becoming a
battleground for AI infrastructure dominance.
Malaysia’s
AI Announcement—And Sudden U-Turn
On May 20,
2025, Malaysia’s Deputy Communications Minister Teo Nie Ching made
headlines by announcing a national AI project powered by 3,000 Huawei
Ascend GPU servers by 2026. The plan, developed with Chinese AI
startup DeepSeek, aimed to position Malaysia as a leader in adopting Huawei’s
AI infrastructure.
Why It
Mattered:
- Huawei’s Ascend chips are
China’s answer to US-made Nvidia GPUs.
- Southeast Asia is a $1
trillion digital economy by 2030 (Google-Temasek Report), making
it critical for tech influence.
But within
24 hours, Malaysia’s government retracted the announcement, calling
it a “private-sector initiative” unaffiliated with national policy. Huawei also
denied selling Ascend chips in Malaysia.
Why Did
Malaysia Backtrack? Pressure From the US
The
reversal came after swift reactions from Washington:
- US Export Control Warnings: Days earlier, the Commerce
Department warned that using Huawei’s Ascend chips “anywhere in the world”
could breach US sanctions.
- Political Pressure: Trump’s AI advisor, David
Sacks, called the deal proof of “China’s full tech stack” expansion,
urging faster US AI exports.
- Transshipment Concerns: Malaysia is under
investigation for allegedly rerouting US chips to China—a violation of
sanctions.
Malaysia’s
Dilemma:
- Balancing ties with China (its
top trade partner) vs. US (a key investor in tech infrastructure).
- Oracle and Microsoft are
building data centers in Malaysia, relying on US-made chips.
The
Bigger Picture: US vs. China in the AI Race
1. US
Strategy: Flood Markets With Nvidia Chips
The Trump
administration is racing to deploy American AI hardware (e.g., Nvidia H100
GPUs) in emerging markets like Southeast Asia and the Gulf. Recent deals
include:
- Saudi Arabia: 1 million+ advanced chips
for AI projects.
- UAE: A massive data center with
US tech.
Goal: Lock in alliances before Chinese
alternatives gain traction.
2.
China’s Countermove: Huawei’s Ascend Chips
Despite US
sanctions, Huawei’s Ascend GPUs are gaining ground:
- Performance: Comparable to Nvidia’s A100
in AI tasks (SemiAnalysis report).
- Cost: 20-30% cheaper than US
alternatives.
- Domestic Reliance: Used by Alibaba, Tencent,
and Baidu in China.
What’s
Next for Malaysia and the Region?
- US Chip Rules 2.0: The Trump administration is
drafting stricter export controls targeting Malaysia and Singapore to
prevent chip diversion to China.
- Data Center Boom: Malaysia’s AI infrastructure
market is projected to grow 15% annually (IDC),
attracting both US and Chinese firms.
- Diplomatic Tightrope: Smaller nations face tough
choices—aligning with US tech or China’s cost-efficient solutions.
Malaysia’s
Huawei saga underscores how the US-China tech cold war is
reshaping global AI infrastructure. For nations caught in the middle, the path
forward requires balancing economic pragmatism with geopolitical risks. As AI
becomes the backbone of modern economies, expect more countries to face similar
dilemmas.