Malaysia's Customs Department seized 72 advanced artificial intelligence servers valued at RM52.9 million at Kuala Lumpur International Airport Free Trade Zone on June 5, 2026 [1, 2, 3, 4]. The servers contained high-tech AI chips and were falsely declared as computer components to avoid detection by authorities [1, 2, 3, 4]. KLIA Customs director Zulkifli Muhammad said, "Preliminary investigations found that the servers were to be re-exported to a country in Asia. The servers were declared as 'computer components' to avoid detection by the authorities" [3].
Initial investigations found the shipment required a permit under Malaysia's Strategic Trade Act 2010 due to export controls on high-performance chips of US origin imposed in 2025 amid US pressure to curb AI chip flows to China [1, 2, 3, 4]. The seizure is being examined under Section 12 of the Strategic Trade Act 2010 for suspected dealings involving restricted items and activities [3, 4].
A Malaysian freight forwarding company that handled the shipment has been called in to assist investigations [1, 2, 3, 4]. The drivers of the smuggling are still being probed as Customs steps up enforcement against illicit strategic goods trade.
In a related case on June 10, Customs seized 4,760 vape liquid cartridges worth RM1.19 million hidden inside computer casings and laced with methamphetamine, also destined for a neighboring country [1, 2, 3, 4]. "The syndicate declared the shipment as computer spare parts to mislead the authorities. Further inspection found the vape cartridges were concealed inside computer casings before being shipped via cargo service," Zulkifli said [3]. This case is under investigation under Section 39B(1)(a) of the Dangerous Drugs Act 1952, with three freight forwarding company employees assisting [3, 4].
Malaysia had previously investigated in 2025 reports of a Chinese company using Nvidia-equipped servers for AI development but found no evidence of illicit semiconductor trade [1, 2]. That August, US authorities charged two Chinese nationals with illegal shipments of AI chips to China via companies in Malaysia and Singapore [1, 2].
Customs held a press conference on June 26 detailing both seizures and ongoing probes [1, 2, 3, 4]. Authorities continue investigating the export violations while stepping up enforcement at key ports and cargo facilities.
