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.
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Facts Only
* Malaysia is evaluating Huawei hardware for a 2 billion ringgit program, valued at about $494 million.
* The evaluation focuses on the Ascend 910C chip, which is Huawei’s marquee product.
* The U.S. administration previously warned that using these chips could violate U.S. export regulations.
* Malaysia is looking at the Ascend 910C for its national AI project.
* Huawei’s accelerators trail Nvidia’s by a wide margin.
* Malaysia hosts a growing AI data center ecosystem built largely by U.S. firms.
* The Sovereign AI program aims to keep government information within Malaysia, including military and intelligence material.
* Telekom Malaysia currently partners with Huawei and uses Nvidia chips for its current AI computing service.
* A public tender resulted in Telekom Malaysia winning the role for a state-linked operator.
* Malaysia’s deputy communications minister announced a national AI system running on 3,000 Huawei Ascend chips in May 2025, which was subsequently retracted.
Executive Summary
Malaysia is evaluating Huawei hardware for a national AI project valued at 2 billion ringgit, approximately $494 million. This evaluation centers on the Ascend 910C chip, which is Huawei’s marquee product, not the newer Ascend 950 line. The consideration stems from concerns that using these chips could violate U.S. export regulations regarding chips, following previous warnings by the Trump administration.
The government is considering this procurement due to Malaysia's role as a major AI data center ecosystem built largely by U.S. firms, positioning it as a significant market for Nvidia, Microsoft, and Oracle. The decision involves navigating extraterritorial authority, as the U.S. is regulating a transaction between other countries. While concerns exist regarding potential security risks related to handling intelligence material, government bodies have not publicly stated an official position on choosing Chinese accelerators.
The process involved a public tender where Telekom Malaysia was selected, despite their existing partnerships with Huawei and use of Nvidia chips in current AI services. The situation is complicated by broader U.S. concerns about untrusted suppliers and the potential for domestic competition, as the government is reportedly discussing alternative processes to allow Nvidia more direct competition.
Full Take
The narrative involves a tension between national strategic data sovereignty and adherence to international trade regulations enforced by extraterritorial authority. The core pattern observed is the manipulation of perceived choice: presenting an option (Huawei) that offers potential economic benefits, while simultaneously leveraging regulatory uncertainty to induce a public decision under pressure from external powers. The shift in the government's stance—from retracting a specific hardware commitment to treating the decision as purely commercial—suggests that political necessity and perceived autonomy are actively being negotiated within the context of geopolitical constraints.
The fact that concerns about data security regarding intelligence material appear to be the secondary driver, rather than the primary economic consideration, reveals an asymmetry in risk assessment: external regulatory fear (U.S. export control) is framed as a more immediate threat than domestic security concerns addressed by sovereign data laws. This suggests a pattern where geopolitical friction is successfully channeled into technical procurement decisions.
The implication for agency lies in how readily national interests are subordinated to the framework of international regulation, even when domestic political actors claim sovereign policy-making rights. The rehearsal and subsequent retraction of public statements demonstrate an awareness of this dynamic; the process itself becomes a tool for managing external expectations rather than an objective assessment of hardware suitability. What remains uncertain is whether genuine divergence from existing U.S.-centric supply chains can occur without triggering significant, traceable diplomatic consequences or internal security reviews.
Bridge Questions: If Malaysia had formally chosen Nvidia in the tender, would the repercussions have been different? How does the structure of extraterritorial authority create an inescapable dilemma for sovereign nations balancing economic opportunity against security compliance? What are the long-term incentives for other global powers to differentiate between nations based on their AI hardware choices?
Sentinel — Human
The text appears to be a well-researched journalistic analysis that synthesizes reported events regarding Malaysian AI hardware decisions and US export policy, framed around sovereignty concerns.