Malaysia is leaning toward using Huawei’s Ascend 910C AI chips as the backbone of a 2 billion ringgit, roughly $494 million, sovereign AI project, Bloomberg reported, citing people familiar with the matter. If the government of Prime Minister Anwar Ibrahim goes ahead, it would be the first known case of a foreign government officially choosing Chinese AI accelerators over American ones, and a direct rejection of warnings from the Trump administration, which said last year that use of the 910C could violate US export regulations.
What the project is
The initiative is meant to give Malaysia greater control over national data. It would cover sensitive government data, military materials and intelligence holdings, with the requirement that data stay inside the country. The project is led by the Malaysian Communications and Multimedia Commission and funded from the digital allocation in the 2026 budget, with government-linked carrier Telekom Malaysia selected as primary operator through a public tender.
The chips under evaluation are the Ascend 910C, not the more advanced Ascend 950 lineup, which remains in limited production. How many chips Malaysia would buy is unclear. Government officials characterize any decision as purely commercial, according to Bloomberg, and Anwar has said Malaysia does not want to be merely a consumer of technology developed overseas. His administration is also encouraging local telecom companies to propose broader AI frameworks in partnership with foreign firms, so the chip choice sits inside a wider industrial policy conversation.
Why the US objects
Washington’s guidance from May 2025 stated that Ascend 910B, 910C and 910D chips are presumed to require a license for export anywhere, and that their use, resale, repair or financing could violate US export regulations. The concern extends beyond the chips themselves. Under the US CLOUD Act, data handled by a US technology company can be subject to US court disclosure orders even when stored abroad, which is part of why data sovereignty has become a procurement criterion rather than a talking point. Anwar acknowledged publicly in April 2026 that he could not argue with Trump over the extraterritorial reach of American law, which makes the current evaluation read less like defiance for its own sake and more like a calculation that the only way out of that reach is to stop using American systems.
The pressure has been applied before. In May 2025, Malaysia’s deputy communications minister announced a plan to build a national AI system on 3,000 Huawei Ascend chips, only for her office to retract the remarks hours later without explanation, and the trade ministry to insist the project was private. The retraction came days after the US guidance on Ascend chips landed, and few in Kuala Lumpur missed the connection. This time the evaluation appears to be running through official channels, and Malaysian National Security Council officials plan to visit Washington in late September for talks before any decision is finalized.
| Factor | Detail |
|---|---|
| Budget | 2 billion ringgit, about $494 million |
| Chips evaluated | Huawei Ascend 910C |
| Lead operator | Telekom Malaysia |
| US position | 910C use may violate export regulations |
| Next step | Officials to visit Washington in late September |
The economics favor Huawei
The 910C costs roughly 60 to 70 percent less than Nvidia H100-class solutions with comparable performance on many workloads, according to analysis cited in regional coverage. For a middle-income government budgeting half a billion dollars, that gap buys a lot of capacity. Huawei has spent years improving its accelerators under US restrictions that cut it off from advanced foreign production tools, and the 910C represents its best shipping product despite those limits.
Telekom Malaysia already has a relationship to build on: it signed a cloud and AI infrastructure cooperation agreement with Huawei in 2020 and uses Huawei technology in its cloud, though its current AI computing service runs on Nvidia chips. That split, Huawei for cloud infrastructure, Nvidia for AI compute, is exactly the arrangement the current evaluation would collapse into a single-vendor commitment. Anwar’s government is also encouraging local telecoms to propose broader AI frameworks with foreign partners, and a parallel tender process could still let Nvidia compete directly for the contract, which gives Washington a formal channel to make its case rather than only a diplomatic one.
Bigger than one tender
The stakes go well beyond Malaysia’s budget line. Huawei is also bidding to build an AI data center for the Egyptian government, which prompted the Trump administration to work on a counterbid. Washington is preparing a program to offer packages of AI hardware, software and applications across the Global South, with possible US government financing, treating AI infrastructure as a geopolitical market it cannot afford to lose. A Malaysian decision for Huawei would hand Beijing a reference customer and a talking point for every other government weighing the same choice between cheaper Chinese silicon and American export conditions.
US officials have responded that American technology remains unmatched and that promoting US AI exports is a top priority. But the argument Malaysia is making is not that Chinese chips are better. It is that ownership of the infrastructure question, data location, vendor jurisdiction and disclosure risk, is worth paying for, and that Washington’s own export controls have made American hardware conditional in ways that push buyers to look elsewhere.
A final decision has not been made. The September visit to Washington suggests Kuala Lumpur wants to price the political cost before signing. Whatever comes out of those talks, the tender documents and the budget line already exist, and other governments in the region are watching how far Malaysia gets before the counteroffer arrives.