Epoch AI finds trade data consistent with chip smuggling via Malaysia

Epoch AI said customs data showed a large, unexplained gap between what China recorded importing from Malaysia and what Malaysia reported exporting to China, in a pattern it judged consistent with large-scale evasion of US export controls on advanced AI chips. Between April 2024 and June 2025, China recorded $3.8 billion in server imports from Malaysia, against $0.6 billion Malaysia itself reported in matching exports.

The two countries’ unit counts were similar — roughly 35,500 machines by China’s count against 36,700 by Malaysia’s — but their valuations diverged sharply: China’s customs data implied an average price of around $106,000 per machine, versus roughly $17,000 in Malaysia’s figures, a gap of about sixfold. Epoch said this pattern, of matching volumes but mismatched values, was consistent with servers being logged at a low declared value on export and a realistic one on import, and estimated the discrepancy was consistent with the diversion of a quantity of Nvidia-equivalent compute in the rough range of 150,000 H100-equivalent GPUs. The flow began within months of the relevant US export controls taking effect and dropped off shortly after Malaysia introduced its own permitting requirements for AI-chip transshipment in July 2025.

The analysis built on an earlier Epoch report from April 2026 that had documented specific smuggling cases through named intermediaries, at a far smaller scale than this trade-data estimate implies; Epoch presented the two as complementary evidence rather than a restatement, one built from individual case investigations and the other from an aggregate statistical anomaly. Trade-data mismatches of this kind are circumstantial — Epoch’s own language was that the pattern was “consistent with” smuggling, not proof of it — but the timing alignment with both the controls and Malaysia’s later crackdown was the strongest part of the case. The finding came the same week Huawei accelerated its own AI-chip roadmap, part of the broader contest over China’s access to advanced compute that the export controls are meant to slow.