By Shadow Pine
On May 19, 2025, Malaysia’s Deputy Minister of Communications, Teo Nie Ching, announced a bold plan: Malaysia would be the first nation to launch a national AI system powered by Huawei’s Ascend chips. Just 24 hours later, the government scrapped the idea, leaving many Malaysians confused and upset. For those who feel a deep cultural connection to China, this reversal feels like a surrender to U.S. pressure. But there’s more to the story. President Donald Trump’s new tariffs, combined with America’s role as Malaysia’s key security partner against potential threats, yes, including from China, have given the U.S. powerful leverage over our tech choices. Let’s break it down simply for Malaysian readers.
What Was the Huawei AI Plan?
The plan was for Malaysia to use Huawei’s Ascend chips, affordable, high-powered chips made by China’s tech giant Huawei, to build a nationwide artificial intelligence (AI) system. AI is like a super-smart computer that can improve healthcare, streamline businesses, or manage traffic. This could have made Malaysia an AI leader in Southeast Asia, using tech from Huawei, a brand many Malaysians admire for its innovation and our shared cultural ties with China.
Why Did Malaysia Back Out?
The U-turn came after swift pressure from the United States. The U.S. has banned Huawei, citing risks that it could share data with China’s government (Huawei denies this). On May 13, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) warned that Huawei’s Ascend chips pose a global security threat and tightened rules to block U.S.-made AI chips from powering Chinese AI systems. Malaysia, caught between its two biggest trading partners, China and the U.S., chose to cancel the Huawei deal to avoid U.S. backlash, which could limit our access to American technology or trigger economic penalties.
What happened behind Malaysia’s swift Huawei reversal?
After Deputy Minister Teo Nie Ching’s May 19, 2025, announcement to use Huawei’s Ascend chips for a national AI system, the U.S. reacted sharply, citing security risks outlined in a May 13, 2025, U.S. Department of Commerce warning. By May 20, Malaysia’s Communications Ministry issued a brief statement retracting the plan, canceling any intent to procure Huawei’s chips, like the Ascend 910B or 910C, for the AI project. No deals were finalized, so the reversal was a policy rollback, likely rushed to dodge Trump’s new tariffs, which could hike costs for Malaysia’s $34 billion U.S. exports, and to preserve U.S. military support vital against South China Sea tensions with China. This left pro-China Malaysians frustrated but showed Malaysia prioritizing trade and security over a risky tech partnership.
Trump’s Tariff Genius: Leverage from Nowhere
President Trump’s new tariffs, rolled out in early 2025, are a game-changer. These taxes on imported goods, like Malaysia’s electronics and semiconductors, hit our exports to the U.S., one of our largest markets. By raising the threat of higher tariffs, Trump has created leverage out of thin air. If Malaysia had stuck with Huawei, we risked tariffs that could make our exports costlier in the U.S., hurting our factories and jobs. This economic pressure, without direct confrontation, may have pushed Malaysia to drop the Huawei plan in just a day. It’s an unprecedented move by Trump, giving the U.S. influence over our tech decisions while keeping Malaysia on edge.
U.S. Security Guarantees: A Key Factor
Beyond trade, the U.S. plays a critical role in Malaysia’s security, especially in the South China Sea, where tensions with China over maritime claims persist. The U.S. provides military support, joint exercises, and strategic partnerships that help safeguard our waters and sovereignty. While we value our cultural and economic ties with China, the reality is that America’s security guarantees are vital against potential regional threats, including, frankly, from China. Defying the U.S. on Huawei could strain this security relationship, leaving Malaysia more vulnerable. This unspoken leverage likely factored into the government’s quick reversal.
Why This Matters to Malaysians
This saga puts Malaysia in a tough spot in the U.S.-China tech war, especially for those who cherish our Chinese heritage. Here’s why it’s important:
- Our Tech Ambitions: Malaysia is a growing hub for data centers that power AI and cloud computing. We need the best chips to stay competitive. Huawei offered affordable tech, but Trump’s tariffs and U.S. security ties push us toward costlier American or non-Chinese chips, which could slow our progress.
- Cultural Ties vs. Hard Choices: Many Malaysians take pride in China’s tech success, rooted in shared history and language. Huawei feels like “our” brand, and U.S. restrictions seem unfair. But our economy relies on U.S. trade, and our security depends on U.S. support, forcing us to weigh cultural pride against practical needs.
- Jobs and Prices: A national AI system could create jobs, from tech engineers to small businesses using AI. Huawei’s chips were budget-friendly, but U.S. pressure means higher costs, which could raise prices for consumers.
- Fairness and Rights: Some Malaysians worry about AI’s broader impact. Recent issues with AI on social media wrongly blocking news have sparked concerns about press freedom. Whether we use U.S. or Chinese tech, we need AI that respects our values.
What’s Next for Malaysia?
The U.S. recently canceled a restrictive Biden-era AI rule that complicated tech access for allies like Malaysia. They’re crafting a new rule, likely friendlier to us but still aimed at blocking China’s AI growth. Trump’s tariffs and America’s security role ensure Malaysia stays cautious, avoiding Huawei while exploring other AI options. Our government is now working to balance U.S. demands with our goal of becoming an AI leader, possibly by partnering with non-Chinese tech firms or developing homegrown solutions.
How Can Malaysians Respond?
This isn’t just about chips, it’s about Malaysia’s future. Here’s what you can do:
- Get Informed: Learn how AI shapes our lives, from apps to healthcare. Knowing the stakes helps us push for smart policies.
- Support Local Innovation: Back Malaysian tech startups and researchers. They’re building AI solutions for us, no matter the chip source.
- Engage with Policymakers: Reach out to local leaders or participate in forums to discuss tech strategy that prioritizes open markets and global partnerships.
The Road Ahead
Non-Huawei chips are pricier than Huawei’s due to Chinese government subsidies, which lower Huawei’s costs through billions in grants and tax breaks, enabling budget-friendly AI chips like the Ascend 910B to be ~10% cheaper than Nvidia’s H20 in China, while non-Huawei chipmakers like TSMC face higher production costs from market-driven environments, limited foundry capacity, and U.S. sanctions compliance; for Malaysia’s national AI system, this shift to costlier non-Huawei chips could raise consumer prices somewhat, despite creating jobs, so advocating for trade deals or subsidies to offset costs, while supporting local innovation with Western-aligned firms like TSMC, ensures a resilient tech ecosystem aligned with open markets, balancing affordability with long-term stability.
Malaysia’s AI dreams are alive, but Trump’s tariffs and U.S. security guarantees have put us in a bind. The Huawei U-turn shows how tariffs, created seemingly from nowhere, and America’s military support give the U.S. leverage to steer our tech choices. While we cherish our cultural ties with China, we must navigate this U.S.-China rivalry carefully to protect our economy, security, and sovereignty. Let’s stay united, keep learning, and push for a tech future that’s innovative, affordable, and truly Malaysian.
Shadow Pine is an independent investigative journalist dedicated to uncovering hidden truths, especially in high-stakes and controversial matters. Operating discreetly to protect sources and maintain integrity, Shadow Pine focuses on stories that others might shy away from, aiming to bring clarity and accountability to the forefront for the well being of the nation.
The views expressed here are that of the author’s and do not necessarily reflect that of Weekly Echo’s