Smuggling 1.28 Petabytes: A Human’s Air Travel with 15 Hard Drives to Malaysia

In the ever-evolving landscape of AI, where innovation often clashes with regulatory hurdles, resourceful companies are finding creative workarounds. CNBC has learned that one AI firm is employing a decidedly low-tech strategy to circumvent export controls: human couriers.

Sources confirm the company is physically transporting data to Malaysia for AI model training, a move designed to navigate restrictions on data transfer and access to advanced computing resources.

The operation involves four tech employees each carrying 15 hard drives, each with a massive 80 terabytes of storage capacity. In total, they are transporting approximately 4.8 petabytes of data – a volume sufficient to train multiple large language models (LLMs).

Insiders explain the decision to physically ship data via air freight, rather than transmit it online, is a preemptive measure to avoid monitoring or raising red flags within existing regulatory frameworks.

The engineers strategically divided the hard drives across several travelers’ luggage to reduce any potential suspicion at Malaysian customs. Upon arrival, the team proceeded to a data center equipped with 300 NVIDIA AI servers leased by the company’s local Malaysian entity, for processing and training.

This is not the first time the company has utilized this method for training AI models in Malaysia. Server leases were previously handled through a Singapore-registered subsidiary.

However, with Singapore recently tightening its AI technology export controls, Malaysia is now requiring that clients establish local corporate registrations, further mitigating any chance of government scrutiny.

This data exporting model of training is predictably more complex than if training took place locally. But, considering the growing difficulty in acquiring advanced AI chips, this workaround is becoming increasingly tempting for many.

Industry sources note that this practice has become more challenging within the last few months, in part due to pressure from the US.