New US AI Chip Export Rules Could Limit Malaysia’s Growth in Data Centers

AmResearch highlights potential challenges for Malaysia following new US AI chip export rules proposed on January 13. These rules, aimed at securing global AI computational capacity, include:

1. No chip sales restrictions for 18 key allies.

2. Caps on GPU purchases for non-allies, with a national chip cap of 50,000 GPUs per country, equivalent to 116MW power.

3. Verified End User (VEU) statuses allowing higher computational capacity for approved entities.

AI Chip Rules

Malaysia, categorized as Tier 2, faces a reduced addressable market for data centers, impacting the sector’s growth potential. However, entities securing “Universal Verified End User” or “National Verified End User” status could bypass some restrictions, offering opportunities for strategic partnerships.

AmResearch advises de-risking AI-related portfolio exposure, reducing it from 16% to 11%. With uncertainties persisting during the 120-day comment period, sector calls for Construction and Property remain unchanged, while the Power sector outlook stays Underweight.

This evolving scenario underscores the importance of Malaysia aligning policies with US technology and security standards to remain competitive.

“We view the rules as potentially reducing the addressable market for DCs in Malaysia.
The national chip cap of 50k GPUs translates into a power requirement of only 116MW, based
on our estimates. For comparison, Tenaga had previously reported maximum DC demand of
4.7GW (actual load utilisation of 248MW), based on 31 projects,” says AmBank.