"Effective immediately, all exports, transships and transits of high-performance AI chips of US origin are subject to a strategic trade permit," the investment, trade and industry ministry said in a statement.

"This initiative serves to close regulatory gaps while Malaysia undertakes further review on the inclusion of high-performance AI chips of US origin" into its so-called Strategic Items List, the government said.

Washington has previously voiced concern about the transshipment of US-made AI chips, particularly the potential of sensitive components being diverted to China.

Malaysia is a major hub for the export and transhipment of high-end AI chips due to its position in the global supply chain, its strategic location and advanced logistical capabilities, experts say.

Kuala Lumpur said last month it was verifying reports that a Chinese company may have been bypassing US export curbs on chips by using servers housing Nvidia chips based in Malaysia.

The Wall Street Journal reported that Chinese engineers had in March brought hard drives to Malaysia containing data to build AI models in Malaysian data centres using advanced US-made chips.

The engineers then planned to bring the AI models back to China, the report said.

The United States has cracked down on exports of advanced semiconductors to China as it seeks to retain a competitive edge over the technology.

Beijing has always insisted it requires Chinese firms to operate according to local laws and regulations.

"China is willing to work with countries in the region, including Malaysia, to jointly maintain a free and open international trade order," foreign ministry spokesman Guo Jiakun said at the time.

Malaysia said on Monday it "stands firm against any attempt to circumvent export controls or engage in illicit trade activities by any individual or company."