The government is seriously evaluating Huawei’s AI accelerators for the initiative, although no final procurement decision has been announced and the number of chips under consideration remains unclear. The project would be operated by state-linked Telekom Malaysia, which was selected through a public tender and already works with Huawei on cloud infrastructure.
The deliberations put Malaysia at the centre of a widening contest between Washington and Beijing over the technology underpinning artificial intelligence. US officials have warned that use of Huawei’s Ascend 910C could violate American export-control rules, while Malaysia has maintained that technology decisions should serve its national interests and comply with applicable laws.
Huawei’s 910C is the company’s flagship AI accelerator currently available at scale. Malaysia is considering that product rather than the newer Ascend 950 series, which remains in limited production. Huawei has sought to expand sales of its AI systems beyond China as US restrictions continue to limit its access to advanced foreign semiconductor manufacturing technology.
Telekom Malaysia’s existing AI computing service uses Nvidia processors, highlighting the competing technology options facing Kuala Lumpur. The government is also discussing another tender process that could give Nvidia and other US suppliers a more direct opportunity to compete for the sovereign AI contract.
Prime Minister Anwar Ibrahim has repeatedly argued that Malaysia should build domestic technological capability rather than remain solely a consumer of systems developed overseas. His government formally established AI Malaysia Berhad under the Digital Ministry in July to lead its ambition of becoming an “AI Nation” by 2030 and to strengthen national AI development, governance and deployment.
Sovereign AI has become particularly important to the government because the proposed infrastructure is intended to process information that could include sensitive government, military and intelligence material. Kuala Lumpur wants such data to remain within Malaysia, reducing dependence on foreign-controlled computing environments and giving national institutions greater authority over storage and access.
Anwar has also questioned the implications of the US Cloud Act, which allows American courts in specified circumstances to compel US technology companies to provide electronic data even when it is stored abroad. Speaking to university students in April, he described the law as unreasonable while acknowledging the difficulty of challenging Washington on the issue.
US officials have raised separate security concerns about Huawei equipment being used to handle intelligence-related material, including information supplied by foreign governments. A State Department spokesperson said secure technology was essential to economic prosperity and warned that suppliers susceptible to government manipulation could pose risks to critical infrastructure, privacy, intellectual property and national security. The statement did not name China or Huawei.
Malaysia’s National Security Council officials are expected to visit Washington later this month for discussions that will include the technology issue. The talks come as the United States promotes American AI hardware, software and applications across developing markets and considers government-backed financing packages to strengthen the international position of US suppliers.
The current evaluation follows an earlier controversy in May 2025, when a deputy communications minister said a Malaysian AI initiative would deploy 3,000 Huawei Ascend chips. Her remarks were withdrawn shortly afterwards, and the Investment, Trade and Industry Ministry clarified that the project concerned was privately driven, not endorsed or coordinated by the government.
At the time, the ministry said any government AI infrastructure programme would require legal, operational and reputational due diligence. It also reaffirmed Malaysia’s commitment to applicable export-control laws while asserting the country’s sovereign right to formulate policy according to national interests.
Malaysia’s National AI Action Plan for 2026-2030 calls for responsible adoption, stronger domestic capabilities and globally competitive locally developed solutions. The programme links AI deployment to economic productivity, public-sector transformation and governance, placing infrastructure choices within a strategy.
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