Malaysia seizes 30 AI servers at KLIA over missing trade permit

Seizure at KLIA

Customs said on 28 October that officers found the 30 servers in Kuala Lumpur International Airport's free trade zone on 15 October. The cargo was valued at about 49.5 million ringgit, or $12.1 million.

Airport customs director Aspalila Ag Tuah told reporters the servers had been declared as electronic components instead of regulated AI servers and lacked a required trade permit. She said the cargo arrived from one Asian country and was to be re-exported to another Asian country. It was routed through Malaysia so that no restrictions would apply when it moved on to the next destination.

Customs said the transfer needed a permit under the Strategic Trade Act 2010. Authorities are reviewing the transport route and signs of false declarations to examine possible organized evasion of export controls. Customs has not named the chip maker, the country of origin or the final destination. A Malaysian company that facilitated the shipment has been summoned to assist the investigation. Customs has announced no arrests.

June seizure and suspected network

Customs suspects the October shipment is linked to a network behind a June seizure at the same airport. On 5 June, officers seized 72 server units containing advanced AI chips valued at about 52.92 million ringgit, or $13 million. Those servers had also been declared as computer components and were meant to be reshipped without the required permit.

Aspalila said at least five cases this year are linked to the syndicate. Seized chips in those cases are worth more than 100 million ringgit in total. The October haul is the smaller of the two: 30 servers against 72, and 49.5 million ringgit against 52.92 million.

Malaysia's permit rules

Malaysia's Ministry of Investment, Trade and Industry said in July 2025 that exports, transit and transshipment of high-performance AI chips of US-origin require a strategic trade permit. The ministry's guidance tells traders how to assess covered chips and seek a determination before moving them. Reuters reported that the rule followed US pressure to stop Malaysia being used as a transit point for advanced chips bound for China. That is the regime the October shipment is accused of sidestepping.

Trade statistics gap

Epoch AI pointed to a gap in official trade statistics. From April 2024 to June 2025, China declared about $3.75 billion of server imports from Malaysia, while Malaysia declared about $600 million of server exports to China over the same period. The institute said the difference suggests possible large-scale indirect trade, but the statistics alone cannot confirm smuggling or the destination of the October shipment. The figures cover a period before the October seizure.

What happens next

The investigation is ongoing. Customs has declined to give further details. It has not said whether prosecutors will bring charges. Customs said it plans to keep monitoring airports and trade zones for illicit shipments.