The Thai technology industry is preparing for the impact of new tiered US AI chip export restrictions set to take effect on May 15.
Siam AI, a leading cloud artificial intelligence service provider, said it might consider expanding its cloud service to other countries when it expands, if import restrictions on AI chips tighten in the future.
Local IT product distributors are stepping up measures to comply with US and Chinese sanctions.
They are strictly pre-auditing customer orders for restricted AI chips to prevent China from potentially using Thailand as a proxy for purchasing the chips and re-exporting them to other countries.
This AI diffusion rule, imposed during Joe Biden's final week in the Oval Office, divided the world into three tiers and set maximum thresholds for the AI computing power that can be shipped to each country.
According to Bloomberg, the rule, which will have an impact on data centre development everywhere from Southeast Asia to the Middle East, drew harsh rebukes from companies including Nvidia Corp, the world's leading maker of advanced AI chips.
The Tier 1 countries are trusted US allies, which will have almost unfettered access to advanced graphics processing units (GPUs).
Those in Tier 2 include most countries, which will be allocated a total of 49,901 H100-equivalent GPUs through 2027.
Tier 3 includes countries under US arms embargoes, such as China. They are effectively barred from accessing advanced US AI computing capabilities.
"Thailand is classified as a Tier 2 country under the AI Diffusion rule, meaning we will face limited imports of restricted AI chips after May 15," Ratanaphon Wongnapachant, chief executive of Siam AI Cloud, told the Bangkok Post.
When it expands AI infrastructure clusters after mid-May, the company will need to seek permission from the US by coordinating through Nvidia's export control processes, for further access to AI chips.
The company already fully ordered the chips and rushed to import them before May 15, said Mr Ratanaphon.
In the future, if Washington further tightens strict rules in the Tier 2 countries, the company might consider building a data centre in a Tier 1 country when it expands the service, he said.
Mr Ratanaphon said the company has experienced no impact from the unfavourable economy as customers need to use great processing power to increase productivity and lower costs which could result in layoffs at large enterprises.
Supparat Singhara na Ayutthaya, general manager for Southeast Asia of Edgnex Data Centers by DAMAC, said there is a chance Chinese companies will accelerate their purchases of Nvidia chips prior to May 15.
He said data centre customers prefer Tier 1 countries, but these countries may have limited capacity. Customers will also consider Tier 2 countries that have the capacity to serve them, said Mr Supparat.
Thailand is regarded as an alternative location to Malaysia to set up data centres, he said.
CLOSE MONITORING
Somchai Sittichaisrichart, managing director of SiS Distribution, expressed concerns about Thai customers potentially using proxies to order AI servers for export to China in an attempt to bypass US-China tech sanctions.
To mitigate risks, the company is monitoring orders of restricted AI chips, not only the orders from its dealers but also from its end-customers, he said.
Failing to comply with the US rules could lead to US tech firms banning AI chip sales to these companies.
However, it is unclear whether cloud service providers using AI chips to offer a cloud service to Chinese companies, either within or outside Thailand, will breach the US regulations, said Mr Somchai.
Pornthep Watcharaamnouy, managing director of Ingram Micro (Thailand), said the company is adapting to the ongoing US-China tech tensions.
Ingram Micro is conducting pre-audit compliance checks when importing restricted AI chips into Thailand.
These checks ensure that customers are really based in Thailand and that the products will be used within the country.
Furthermore, the company verifies customers' backgrounds, including their source of funding, he said.