Malaysia weighs Huawei chips for sovereign AI, Bloomberg reports

Malaysia is leaning towards Huawei silicon to run its national AI project, according to Bloomberg. No foreign government has openly chosen Chinese AI accelerators over American ones before. Washington told the world last year that buying these particular chips could break its rules. Faris Mokhtar, Mackenzie Hawkins and Niki Koswanage reported the deliberations for Bloomberg. Their sources were people familiar with the matter, who were not authorised to speak publicly. Nothing is signed. The government is seriously evaluating Huawei hardware for a 2 billion ringgit programme, worth about $494mn. How many chips it would buy remains unclear. TNW has not independently verified the report. The chip in question is the one Washington named Malaysia is looking at the Ascend 910C, Bloomberg reported. That is Huawei’s marquee product, not the newer Ascend 950 line, which remains in limited production. The choice is neither random nor innocent. The Trump administration singled out the 910C last year. Using those chips anywhere, it warned, could violate US export regulations. That guidance rests on extraterritorial authority. In plainer terms, Washington is regulating a transaction between two other countries. No government has yet tested it by refusing in public. Malaysia may be about to. The hardware gap is not in dispute. Huawei’s accelerators still trail Nvidia’s by a wide margin. The company has spent years working around US restrictions on the production tools it needs. In August one of its scientists argued that Nvidia will eventually hit the same chip wall. That is a claim about the future, not the present. Why a data-centre hub would buy Chinese Malaysia is not short of American compute. It runs one of the fastest-growing AI data centre ecosystems anywhere, built largely by US firms. Southeast Asia as a whole is planning four times the capacity it currently operates. That makes Malaysia a real market for Nvidia, Microsoft and Oracle. It also makes this decision expensive for them. The reason is data, not price. The sovereign AI programme exists to keep government information inside Malaysia, military and intelligence material included. Prime Minister Anwar Ibrahim has named the obstacle. Under the US Cloud Act, American courts can compel US technology companies to hand over data even when it sits overseas. “I do not consider that law reasonable, but how does one argue with President Trump?” Anwar said in April, speaking to university students. Bloomberg reported the remark. So Malaysia picked a state-linked operator. Telekom Malaysia won the role through a public tender, Bloomberg reported. It already partners with Huawei and runs Huawei technology in its cloud infrastructure. Its current AI computing service, however, uses Nvidia chips. Telekom Malaysia did not respond to Bloomberg’s request for comment. Nor did Huawei, the Prime Minister’s Office or the Ministry of Digital. Washington is pushing back on two fronts “Secure technology is the foundation of a prosperous economy,” a State Department spokesperson told Bloomberg. The spokesperson called Malaysia an important partner and pointed to a 2025 reciprocal trade agreement between the two countries. They also warned that untrusted suppliers can be manipulated or controlled by authoritarian regimes. They did not name China or Huawei. Behind that, the objection is narrower and sharper. US officials have told their Malaysian counterparts they are worried about Huawei equipment handling intelligence material. That includes sensitive information shared by foreign governments. Malaysian national security council officials are due in Washington later this month. Some on the US side are also frustrated that American firms did not get a fair run at the tender. Anwar’s government is now discussing a second process that would let Nvidia compete more directly, Bloomberg reported. Neither Nvidia nor AMD responded to its requests for comment. This is the harder half of American chip policy. Washington has been happy to trade chips for diplomatic outcomes. It is separately preparing packages of AI hardware, software and financing for the Global South. Incentives are the easy part. This is the part where a country says no. It nearly happened once already There is a rehearsal for this. In May 2025 Malaysia’s deputy communications minister announced a national AI system running on 3,000 Huawei Ascend chips. Her office retracted the remarks almost immediately, without explanation. The investment ministry then said the project was private and had no government backing. Some Trump officials read that retreat as proof their guidance worked. The investment ministry read it differently. Malaysia remained committed to export control compliance, it said, while it “reaffirms its sovereign right to formulate its policies in line with national interest”. Sixteen months later, the same chip is back on the table, and this time the government is not distancing itself. One person familiar with conversations inside Anwar’s administration told Bloomberg that Malaysia treats the decision as purely commercial. What Huawei gets, if it lands Huawei has been hunting exactly this kind of customer. It is bidding to build AI data centres for Egypt, which pushed Washington into assembling a counterbid. It has courted buyers across the Middle East and Southeast Asia. Domestic demand is climbing too. DeepSeek is planning a large Huawei chip order for a new data centre. What Huawei lacks is a sovereign customer willing to be named. Egypt is still a bid. Malaysia would be a government choosing the Chinese option in public, in a country that already hosts American data centres, with Washington watching. That precedent is worth more than the 2 billion ringgit. The caution belongs at the end, as it did at the start. Malaysia has not decided. A second tender may yet hand the contract to Nvidia. The last time this surfaced, it was retracted within days. What has changed is that the direction of travel is on the record, and the security council is flying to Washington to explain it. Get the TNW newsletter Get the most important tech news in your inbox each week.