Jun 16, 2025 11:45:00

Chinese AI companies are circumventing export controls by shipping data for training AI models to Malaysia on hard drives

The United States has imposed numerous trade restrictions on China,

including the 'AI Proliferation Control' which restricts the export of AI chips from NVIDIA and other companies . To counter these export controls, it has been pointed out that Chinese AI companies are 'packing training data onto hard drives and transporting them from China to data centers in Malaysia to build AI models.'

China's AI Companies Dodge US Chip Curbs by Flying Suitcases of Hard Drives Abroad - WSJ
https://www.wsj.com/tech/china-ai-chip-curb-suitcases-7c47dab1

Chinese AI outfits smuggling suitcases full of hard drives to evade US chip restrictions — training AI models in Malaysia using rented servers | Tom's Hardware
https://www.tomshardware.com/tech-industry/artificial-intelligence/chinese-ai-outfits-smuggling-suitcases-full-of-hard-drives-to-evade-us-chip-restrictions-training-ai-models-in-malaysia-using-rented-servers

Due to the strict export restrictions imposed by the United States on China, Chinese AI companies are finding it difficult to obtain the advanced hardware they need for training, and are trying to obtain it through various methods. Although NVIDIA denied the allegation by AI company Anthropic that they were smuggling their goods by disguising them as fake pregnant women or live lobsters, it has been found to be true.

NVIDIA strongly opposes the AI company's claim that China is smuggling GPUs and CPUs by having them carried by fake pregnant women or by hiding them in live lobsters, calling it a fabrication, but both are true - GIGAZINE

Because it is difficult to transport them directly from the United States to China, it has been pointed out that Malaysia, which is not subject to US export controls, is being used as a transit point.

Taiwan's AI chip exports to Malaysia have increased fourfold, raising suspicions of diversion to China - GIGAZINE

However, the method that has been revealed this time is not to 'bring AI chips to Malaysia and then to China,' but to rent NVIDIA's AI servers in Malaysia and build the AI there.

According to the Wall Street Journal, the Chinese AI company split the training data for the AI model onto 15 HDDs, each with about 80TB capacity, and had four engineers transport them to a data center in Kuala Lumpur, Malaysia, to avoid being detected by customs and immigration officials. The total amount of data was about 4.8PB, equivalent to the data source of several large-scale LLMs.

As for the decision to transport it on a hard drive, the source explained that 'it would take too long to transfer the data without attracting attention.'

In addition, IT news site Tom' Hardware points out that Chinese AI companies are being forced to take such measures because the sanctions are having an effect.