New: Chinese firms aim to install ~115,000 advanced Nvidia chips in dozens of AI data centers. Construction is underway. DeepSeek wants to collaborate. What’s unclear is how they plan to get hardware that the US has effectively banned from sale to China. 🧵

Malaysia's controls seek to "close regulatory gaps" while the trade ministry undertakes further review. Washington has separately drafted (though not finalized) export controls on AI chip sales to Malaysia and Thailand over China diversion concerns

Malaysia will require permits to export advanced American AI chips if companies/individuals know or have "reasonable grounds" to suspect those chips will be misused. US is worried about potential smuggling of AI chips to China via Malaysian intermediaries.

Here's how this fits into the ongoing debate over Nvidia/AMD sales to the Gulf (which, despite big project announcements in May, haven't been licensed) . Talked w @TheStalwart & @tracyalloway about this topic (& Malaysia's maybe Huawei project) last month:

Huawei is trying to sell small numbers of its older AI chips to parties in the UAE, Saudi Arabia & Thailand. Also offering remote access to more advanced hardware that it won't export because production capacity is limited. No deals finalized. w @GaoYuan86.

RT @TheStalwart: A thing you often hear about China is that despite its vast size, it doesn't have a lot of great land. But maybe people st….

RT @business: The US plans to restrict shipments of AI chips from the likes of Nvidia to Malaysia and Thailand, part of an effort to crack….

This story was a big team effort & wouldn't exist at all without @imandylin2's incredible data work. The link below is free for a week. If you know something we should know, I'm @/mackhawk.71 on Signal, which I treat as off-record unless you say otherwise.

A couple takeaways:. 1. Despite Huawei’s progress & Beijing’s push for firms to use domestic chips, at least some companies still want Nvidia.2. Even if they pull it off, these projects would be dwarfed by US AI infra (though there’s of course additional investment in China). 8/

We asked > a dozen people familiar with US probes for an estimate of how many banned Nvidia chips are in China. Most didn’t have one. Two senior Biden officials said 25,000. None said they know of a smuggling network capable of procuring 115,000 for a centralized location. 7/

A senior Commerce official under Trump has said AI chip smuggling is a “fact” (he didn’t name Nvidia) — & that Huawei’s output remains limited at 200,000 (his # doesn’t include a stockpile of Huawei chips ordered from TSMC). The agency didn’t answer detailed Qs for this story. 6/

Nvidia’s CEO has said there’s “no evidence” of AI chip diversion. The company doesn’t provide operational support for restricted products in China, and said it wouldn’t make sense for Chinese companies to use older Nvidia chips when Huawei processors are “widely available”. 5/

It’s very hard to know with certainty what hardware the data centers are using/could use. To be clear: Our story doesn’t say Chinese companies have or can get 115,000 restricted Nvidia chips. It describes the ambition. One key Q then becomes whether that ambition is realistic. 4/

So, are these data centers real? The easiest way to know is to visit. Bloomberg reporters went to Xinjiang & saw facilities under construction. But a building exterior doesn’t prove what’s inside. Some firms agreed to talk then abruptly cancelled. Most ignored/declined. 3/

Investment approvals & company filings explicitly show that Chinese data center operators, mostly in Xinjiang, seek ~115,000 Nvidia H100s & H200s — both subject to US curbs. But documents are, well, documents — and they didn’t explain how companies would pull this off. 2/

The Trump admin has lifted recent curbs on chip design software sales to China, as Washington & Beijing implement a trade deal designed to see both countries ease flows of critical tech. Cadence, Synopsys & Siemens all confirmed they received a notice

Almost 10 days since Trump declared a “done” deal w Beijing, US companies remain largely in the dark on when they’ll get magnets from China & whether Washington in turn will allow a host of other exports to resume. with @jendeben @JoeDeaux @gablova & team .

Masayoshi Son wants to build a $1T industrial park in Arizona, which he envisions as a version of China’s Shenzhen. SoftBank has pitched Trump officials & seeks TSMC as a partner (not clear that TSMC would be interested). w @leeminjeong83 & Anto Antony

RT @leeminjeong83: SoftBank Masayoshi Son's latest big bet is to build a $1 trillion AI hub in Arizona. He's looking to team up with TSMC a….

Beijing’s response to Taipei aligning with the US on semiconductor export controls: