KUALA LUMPUR (Nov 12): Malaysia is drafting a law to strengthen oversight of data centres and prevent shipments of advanced chips from being diverted to other countries, said Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani on Thursday.
Johari said Digital Minister Gobind Singh Deo had informed him that the legislation would require disclosures on the identities of data centre operators and hyperscalers, facility locations, electricity consumption and the number of graphics processing units (GPUs) imported.
He said the government wanted to ensure that GPUs and servers brought into Malaysia were used in local data centres rather than shipped to other countries.
“What happened previously was that some companies would rent space in data centres and import GPUs into Malaysia, but did not actually use the chips. Instead, they re-exported them to other countries," he told reporters on the sidelines of the launch of MySaham MITI, a mobile application for Bumiputera share allocations.
“The US considers certain transactions involving these chips to be illegal. As a country, we want to ensure that such activities do not take place in Malaysia.
“We are looking into whether there are laws that would allow us to take action.”
Johari's remarks come amid reports of Singapore-based Megaspeed International being investigated for allegedly flouting US export restrictions on advanced computing chips to China.
A former executive at Megaspeed is alleged to have had an affair with Jensen Huang, the chief executive officer of global chipmaker Nvidia Corp.
The woman is also suspected of being a Chinese spy who helped entities circumvent US restrictions on chip exports to China.
After these allegations surfaced, Nvidia is investigating the conduct of its CEO and whether any business or national security secrets had been compromised.
The law Malaysia is drafting would be separate from the Digital Infrastructure (Data Centre) Bill, which the Economy Ministry said last month is expected to be presented to the cabinet next year before it is tabled in Parliament.
The bill aims to regulate the industry's growth, address pressure on energy and water resources, and ensure data centre investments benefit Malaysia's digital ecosystem.
Data centres accounted for 9.28% of Malaysia's total electricity consumption as of September, with their share projected to rise to 31% by 2035, according to the Energy Commission.