Chinese AI companies are reportedly using Malaysia to bypass the US sanctions

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Recently, it was reported that four employees from an AI technology developer from China had "smuggled" 15 hard drives, each containing 80TB of data. These drives were intended to train AI systems from the country using server machines rented in Kuala Lumpur. So, what should you know about it?

 

How are they doing this?

For your information, a report from the Wall Street Journal also said that this had been planned for several months, and for these companies, it was faster to just fly these hard drives to Malaysia than to send the data to a server machine here via an internet connection.

Additionally, four workers were flown to Malaysia to make it easier for them to bring in the hard drives and not raise Malaysian Immigration's suspicions about why so many computer components were being brought into the country.

These individuals then went to a local data centre company, where the Chinese AI company had already rented 300 AI server machines powered by NVIDIA AI processing chips for training machine learning and AI systems.

 

Why are they doing this?

The leasing of server machines and data centre capacity by Chinese companies does not appear to be prohibited.

The issue here is that, due to China's trade and import/export restrictions, this could be seen as a way for the companies to circumvent those restrictions.


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