Malaysia is racing to become Southeast Asia's AI computing hub, but its dependence on Taiwanese chips gives Taipei leverage just as relations with Kuala Lumpur sour.

• Malaysian Prime Minister Anwar backed China's position on Taiwan, and Taiwan's foreign ministry hit back hard, warning it could scare off Taiwanese investment.
• With Washington blocking China's access to top Nvidia chips, Chinese firms like ByteDance, Alibaba and Moonshot AI are renting computing power through data centers in Malaysia and nearby countries instead.
• That workaround appears legal for now — US export rules cover shipping chips abroad, not logging into them remotely.
• Every one of those Nvidia chips still gets made by TSMC, and Taiwanese companies build much of the surrounding AI server hardware.
• Malaysia, Indonesia and Thailand are building 31 large data centers, up from just two today.

Outlook: Taiwan is unlikely to cut off supply, but a review of trade ties with Malaysia would squeeze both Kuala Lumpur's AI ambitions and China's backdoor route to computing power.