Malaysia’s government retracted its earlier plan to deploy AI systems using Huawei Ascend GPU chips.

The initial announcement was made by Deputy Minister Teo Nie Ching on May 20 but was later withdrawn without explanation.

The original plan included deploying 3,000 Huawei AI servers by 2026 and collaborating with DeepSeek.

Huawei said it has not sold Ascend chips in Malaysia, and the government has not made any purchases.

This comes amid increased US scrutiny over Huawei’s chip exports.

The US Commerce Department recently updated guidelines warning that using Huawei’s Ascend chips globally could violate American export controls.

Malaysia is under US pressure due to its role in the AI and semiconductor supply chain.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Malaysia’s tech balancing act reflects broader Southeast Asian dynamics

The Malaysian government’s rapid reversal on Huawei chips highlights the complex position Southeast Asian nations face in navigating US-China tech competition.

This isn’t Malaysia’s first partnership with Huawei, as the Chinese tech giant has established significant relationships across multiple sectors, including a 2019 collaboration with Telekom Malaysia for enterprise digital transformation and a separate partnership with Malaysia Airports for airport connectivity solutions 12.

The retraction comes as Malaysia implements stricter regulations on semiconductor shipments under direct US pressure, with the country establishing a special regulatory task force to monitor chip exports 34.

As the world’s fourth-largest chipset exporter with $36.94 billion in semiconductor exports in 2024, Malaysia faces intense scrutiny over potential illegal rerouting of advanced chips to China, directly impacting its crucial tech sector 5.

This incident reflects the broader reality for Southeast Asian nations caught between competing technological ecosystems, where decisions about AI infrastructure partners can trigger immediate diplomatic and economic consequences.

2️⃣ Southeast Asia emerges as critical battleground in global AI development