Malaysia Mulls Huawei AI Chips to Boost Sovereign AI

Malaysia's Sovereign AI Initiative and Huawei Chip Consideration

Malaysia's government is evaluating the procurement of artificial intelligence (AI) chips manufactured by China-based Huawei Technologies to advance its national sovereign AI ambitions. This potential acquisition is part of a RM2 billion national initiative to transform Malaysia into a major broker in AI datacentres. The consideration represents a significant geopolitical decision, as it would mark the first known instance of a foreign government in the current climate opting for Chinese AI accelerators over US-made alternatives.

Key Facts

What Is Malaysia's Sovereign AI Initiative?

Malaysia's sovereign AI initiative is a RM2 billion national program aimed at positioning the country as a significant broker in AI datacentres. The initiative involves evaluating AI hardware procurement options, with Huawei's AI chips currently under consideration by the Malaysian government as a potential solution for national AI infrastructure development.

According to Bloomberg, the Malaysian government is weighing the option of purchasing Huawei's AI hardware, which would provide the Chinese company with a much-needed boost in its AI chip sales revenue. The decision remains pending, with Prime Minister Datuk Seri Anwar Ibrahim still mulling over the possibility of purchasing some of Huawei's AI chips.

Malaysia's RM2 billion sovereign AI initiative could result in the first known instance of a foreign government selecting Chinese AI accelerators over US-made ones in the current geopolitical climate.

How Do Huawei AI Chips Compare to NVIDIA Accelerators?

Huawei's AI chips currently do not perform at the level of NVIDIA's AI accelerators, according to the source material. However, Huawei has emerged as the primary alternative to the US-based GPU company, capturing market share since the US government imposed restrictions on NVIDIA's hardware sales to Chinese companies.

The US restrictions have curtailed which Chinese companies can purchase NVIDIA hardware, creating a market opening that Huawei has exploited. Despite the performance gap, Huawei's position as the leading alternative has strengthened due to these trade constraints, making the company a viable option for nations seeking AI infrastructure outside US supply chains.

Huawei's AI chips remain less performant than NVIDIA's accelerators, yet the company has become the primary alternative due to US government restrictions on NVIDIA hardware sales to Chinese entities.

What Are the Geopolitical Risks of This Decision?

The potential acquisition of Huawei AI chips carries significant geopolitical risk, particularly regarding relations with the US Trump administration. The decision could draw the ire of US President Donald Trump, who has maintained a confrontational stance toward Huawei since his first presidential term.

Prime Minister Anwar Ibrahim has previously acknowledged that US regulations may pose challenges to Malaysia's AI ambitions, specifically citing the US Cloud Act. Under this law, American courts can compel US technology companies to hand over electronic data even if it is stored overseas. Trump signed the Cloud Act into law during his first term.

"I do not consider that law reasonable, but how does one argue with President Trump?"

— Datuk Seri Anwar Ibrahim, Malaysian Prime Minister (via The Edge)

The US Cloud Act, signed into law by President Trump during his first term, allows American courts to compel US technology companies to surrender electronic data stored overseas, posing a regulatory challenge to Malaysia's AI ambitions.

Who Is This For?

This potential procurement is directed at Malaysia's national AI infrastructure development, specifically targeting the country's ambition to become a major broker in AI datacentres. The decision involves the Malaysian government as the primary actor, with Prime Minister Anwar Ibrahim as the key decision-maker evaluating the strategic and geopolitical implications of the potential purchase.

The initiative would serve Malaysia's broader sovereign AI goals, though the specific end-users and applications remain unspecified in the source material. The deal's significance extends beyond Malaysia, as it would represent a notable shift in the global AI hardware market and potentially influence other nations' procurement decisions.

Common Questions

Has Malaysia signed a deal with Huawei for AI chips?

No deal has been inked. Prime Minister Datuk Seri Anwar Ibrahim is still mulling over the possibility of purchasing some of Huawei's AI chips. The Malaysian government is currently weighing its options regarding the procurement, with no final decision announced.

Why is Malaysia considering Huawei AI chips despite US restrictions?

Malaysia is pursuing a RM2 billion initiative to become a major broker in AI datacentres. Huawei has become the primary alternative to NVIDIA since US restrictions curtailed which Chinese companies can purchase US-made AI hardware, making Huawei a viable option for nations seeking AI infrastructure outside US supply chains.

What is the US Cloud Act and how does it affect Malaysia's AI plans?

The US Cloud Act, signed by President Trump during his first term, allows American courts to compel US technology companies to hand over electronic data even if stored overseas. Prime Minister Anwar Ibrahim has stated he does not consider the law reasonable, acknowledging it may pose a challenge to Malaysia's AI efforts.

Sources and Methodology

This article is based on reporting from Bloomberg, as republished by The Edge Malaysia. The original source material was published on Lowyat.NET. All facts, quotes, and figures are derived directly from the provided source material. No additional data has been synthesized or extrapolated beyond the source content.

This article was last updated on March 2026.