A shocking spike in GPU imports to Malaysia has raised eyebrows across the tech and political landscapes, as new data reveals a 3,400% year-over-year increase in April 2025 alone — totaling $2.74 billion in shipments. This explosive rise, detailed by Taiwan’s International Trade Administration and amplified by tech insiders, points to potential smuggling operations and geopolitical workarounds of U.S. export restrictions.

Over just four months, Malaysia has imported a staggering $6.45 billion worth of GPUs — more than its entire haul in 2024. The surge began in January with $1.12 billion in imports (up 700% YoY), dipped slightly in February to $627 million, then shot up again in March to $1.96 billion — another 3,400% spike from the same month last year. The momentum has not only persisted but intensified.

Industry insiders and analysts suspect Malaysia may be serving as a conduit for restricted tech heading to China, as companies scramble to stockpile AI-capable hardware like Nvidia’s high-performance GPUs amid tightening U.S. sanctions. These include the “AI Diffusion Rule,” which took effect on May 15 and further restricts advanced chip sales to Chinese entities.

Customs data backs the theory: Taiwan’s exports of computing systems to Malaysia jumped 55,117% in March 2025 compared to the previous year — a figure too vast to ignore. Additionally, reports of smuggling rings in Singapore and Malaysian ports add fuel to the fire, with one major bust linking GPUs directly to China’s DeepSeek AI lab.

Nvidia’s evolving reporting practices may further cloud the situation. The firm now accounts for revenue by billing address rather than shipment destination, making it harder to trace where these valuable chips truly end up. Critics argue this method lacks transparency and could enable shadow supply chains.

With U.S. officials urging Malaysia to clamp down on high-tech rerouting, the next moves in this unfolding drama could shape global AI development — and diplomatic tensions — for years to come.

Read the full report: Tom’s Hardware