US eyes AI chip restrictions in Malaysia, Thailand over China ties, Bloomberg News reports

July 4 (Reuters) - U.S. President Donald Trump's administration is planning new restrictions on the export of AI chips, such as those from Nvidia NVDA.O, to Malaysia and Thailand over concerns that the technology could be diverted to China, Bloomberg News reported on Friday, citing people familiar with the matter.

The draft rule from the Commerce Department is not yet finalized and could still change, the report said.

Trump's administration has announced it planned to rescind and replace the Biden administration's export curbs on sophisticated artificial intelligence chips put in place by former President Joe Biden.

The regulation aimed to restrict exports of AI chips and technology, retain advanced computing power within the U.S. and its allies, and expand efforts to limit China’s access.

The government intends to couple the Malaysia and Thailand controls with a formal rescission of these curbs, the Bloomberg report said.

In June, Malaysia said it was verifying media reports that a Chinese firm operating in the country was using servers fitted with Nvidia chips and other AI hardware to train large language models.

The U.S. Department of Commerce did not immediately respond to a Reuters' request for comment. An Nvidia spokesperson declined to comment.