KUALA LUMPUR (Jan 13): YTL Power International Bhd (KL:YTLPOWR), which is in the midst of setting up its own artificial intelligence (AI) data centres using the latest chips by US chip giant Nvidia Corp, does not expect to be impacted by the proposed US rules on advanced chip exports into countries like Malaysia.
Speaking to The Edge in response to a query on the impact of the potential export curbs, YTL Power managing director Datuk Seri Yeoh Seok Hong reiterated that the group is the first non-US company selected in Asia to partner Nvidia to deploy and manage a supercomputer driven by the GB200 Blackwell GPUs or graphic processing units in the region.
“We are confident that we will not be affected by the latest announcement on the limitation on the export of GPUs,” said Yeoh.
“We understand that American hyperscalers, which include Nvidia, are not subject to the limits. As the only non-US company selected by Nvidia in Asia to deploy its latest chips on its DGX Cloud AI platform, there should be no issue with our roll-out,” he said.
Yeoh also said the sanction will not affect YTL Power’s customer pipeline for its AI data centres.
From their Jan 8 peak of RM4.51, shares of YTL Power have fallen as much as 11.3% to RM4 at Monday’s market close, dragged by concerns over the impact of the potential US chip export curbs on YTL Power's prospects of securing the latest, highly sought-after Nvidia chips made public since late 2023.
Shares of YTL Corp Bhd (KL:YTL), which owns a 48.43% direct stake in YTL Power, declined 14% over the same period.
YTL was mentioned by Nvidia, when the latter revealed the Blackwell chips in March 2024. In a statement, Nvidia said “sovereign AI clouds” such as YTL Power’s will provide Blackwell-based cloud services and infrastructure.
To be sure, under the alleged proposed regulation, firms headquartered in the US can apply for blanket US government permission to ship chips to data centres in most other parts of the world, based on certain volumes.
Separately, Nvidia DGX Cloud vice-president Alexis Black Bjorlin also named YTL Corp as one of five partners, alongside Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle Cloud, which will “bring cutting-edge Nvidia technology to their clouds”.
The supercomputer combines 72 Blackwell GPUs and 36 Grace CPUs interconnected by the fifth-generation NVLink communications link to accelerate the development of AI models on DGX Cloud.
Analysts’ views on the prospects of proxies in the AI race have been mixed due to uncertainties raised from any cuts in chip supply.
A fund manager, when contacted, believes that the policy will be positive for YTL Power in view that “even less [parties] will get access to GB200 [GPUs] in its vicinity, while it has preferential treatment”.
Up in the air is whether companies like YTL Power plan to secure the validated end user (VEU) status — which requires adherence to US government security requirements — to secure higher limits for the GPUs, and bypass the nationwide volume limits that may be imposed on countries like Malaysia.
YTL Power first announced in December 2023 that it was going to collaborate with Nvidia to build an AI infrastructure that will be powered by the American chip firm’s technology. The collaboration was announced when Nvidia founder and chief executive officer Jensen Huang made his maiden visit to Malaysia.
Aside from YTL Power, companies like Amazon, Google, Microsoft, and Oracle — the same list of five Nvidia partners mentioned by Bjorlin — are also setting up data centres in Malaysia.
Analysts covering YTL Power, which has set aside 100MW of its 500MW Kulai data centre capacity for AI infrastructure, have previously said that the first 20MW of the AI portion could begin operating from mid-2025 if the chipsets arrive on time.
At RM4, YTL Power is trading at a trailing price-earnings ratio (PER) of 10.7 times and a forward PER of 10.9 times, compared with forward PERs of peers such as Tenaga Nasional Bhd (KL:TENAGA) at 19.8 times, Malakoff Corp Bhd (KL:MALAKOF) at 14.4 times, and Mega First Corp Bhd (KL:MFCB) at 9.7 times.
There are currently 13 ‘buy’ calls and one ‘neutral’ rating among 14 research houses covering the power, water and telco firm, with target prices ranging from RM3.30 to RM7, and an average TP of RM5.31. At RM4, the group has a market capitalisation of RM32.85 billion.