Thailand's strategic investment in cloud and data centres could be disrupted by US President Donald Trump's plan to restrict shipments of artificial intelligence (AI) chips from Nvidia Corp to Malaysia and Thailand, part of an effort to crack down on suspected semiconductor smuggling to China, say tech and cloud data centre executives.
According to Bloomberg, a draft rule from the US Commerce Department seeks to prevent China, which faces a US ban on sales of Nvidia's advanced AI processors, from obtaining such components through intermediaries in the two Southeast Asian nations, said people familiar with the matter.
The rule has yet to be finalised and could still change, said the sources, who requested anonymity.
Pathom Indarodom, managing director of SVOA, said this move may result in the US slapping export restrictions on Thailand for high-tech equipment, especially Nvidia's flagship graphics processing unit (GPU) chips such as A100, H100 and the latest Blackwell B200.
These chips power AI models globally, from OpenAI and Google to emerging deep tech startups, government agencies and universities, said Mr Pathom.
He said if access to these chips is blocked, Thailand could experience major disruptions, mainly in AI development research and local AI startups, which rely on Nvidia GPUs to train and test models.
This would also affect Thailand's competitiveness at the global level, said Mr Pathom.
Moreover, major Thai cloud providers that utilise Nvidia chips would be impacted as their AI-as-a-service offerings would be unable to scale, he said.
Enterprise clients may shift workloads overseas, while national data sovereignty faces rising risks as data processing will move to offshore, said Mr Pathom. The overall effect would chill Thailand's goal of becoming a regional AI hub, he said.
If Western technology is inaccessible, Thailand might have to shift to alternative technology from China. Geopolitical tensions demand Thailand devise backup plans by investing in open-source AI models, said Mr Pathom.
Thailand should forge strategic tech alliances with other Asian nations to create a resilient AI ecosystem, he said.
According to the Board of Investment, from 2022 to 2024 investment promotion applications for data centre and cloud services totalled 27 projects with a combined investment of 290 billion baht.
There were eight new data centre projects in the first five months of this year valued at 183 billion baht.
According to a report from Cushman & Wakefield, a leading commercial real estate services firm, Malaysia's strong data centre development will see its population per megawatt ratio consolidate faster than any other Asia-Pacific market through 2030, with Thailand ranked second and Japan third for fastest rates of consolidation.
Supparat Singhara na Ayutthaya, general manager for Southeast Asia at Damac Digital, a data centre builder, expressed concern over the planned restriction on shipments of AI chips to Malaysia and Thailand, noting it could undermine investor confidence in Thailand's cloud and data centre industry.
He said the Commerce Ministry and Digital Economy and Society Ministry need to collaborate to impose stricter export controls in Thailand, while actively engaging with the US government.
If left unaddressed, Thailand may find itself excluded from access to the latest technological advancements, said Mr Supparat.
NO DIRECT SANCTIONS
Somchai Sittichaisrichart, managing director of SIS Distribution, said the planned US regulation does not directly sanction Thailand, instead introducing stricter oversight to prevent Chinese firms from accessing AI computing services or importing chips via Thai nominees.
"Thai companies can still import AI chips," he said.
"However, once the regulation takes effect, scrutiny will likely extend beyond the importer to the intended use, particularly to ensure chips are not deployed for Chinese customers."
A source in the cloud service sector who requested anonymity said his company may consider expanding operations from Thailand to other countries to mitigate potential risks from the planned US rules.
Putt Tratkosit, chief executive of Light Up Total Solution Plc (LTS), said the company does not face any risk or direct impact from the US plan to restrict shipments of AI chips to Malaysia and Thailand.
He said the company is not involved in importing chips for resale to China.
LTS provides design and installation services for AI infrastructure, as well as commissioning services for government agencies and companies in Thailand.
The company works closely with Siam AI Corporation, a high-performance cloud and AI infrastructure provider, which is the only certified Nvidia Cloud Partner in Thailand authorised to purchase Nvidia chips directly from the US.
Should US export control measures take effect in the future, importing chips may require additional approval.
However, the regulation does not prohibit domestic use, meaning AI and data centre services can continue operating normally, said Mr Putt.
Demand for AI solutions in Thailand remains strong, and LTS sees a short-term upside as customers may accelerate imports of AI chips, leading to faster deployment of infrastructure projects, he said.
