Malaysia’s Deputy Communications Minister Teo Nie Ching had reportedly said the country was using Huawei chips and servers for a groundbreaking AI project.

Malaysia declared it’ll build a first-of-its-kind AI system powered by Huawei Technologies Co. chips, only to distance itself from that statement a day later, underscoring the Asian nation’s delicate position in the US-Chinese AI race.

Malaysia’s government has reversed its plan to launch a nationwide AI system powered by Huawei chips only a day after touting the project.

Just one day after announcing plans to deploy 3,000 Huawei Ascend-powered AI servers by 2026, Malaysia's Deputy Communications Minister Teo Nie Ching abruptly retracted the statement on May 20. The reversal,

KUALA LUMPUR] Malaysia declared it will build a first-of-its-kind AI system powered by Huawei Technologies chips, only to distance itself from that statement a day later, underscoring the Asian nation’s delicate position in the US-Chinese AI race.

Washington warned that using Huawei's chips could violate export controls. Beijing thinks that undermines "consensus" from the Geneva trade talks.

Malaysia's government did not develop, coordinate or endorse an artificial intelligence project involving a local company and Huawei Technologies, its trade ministry said in a statement on Wednesday.

Malaysia faces global attention after a confusing AI announcement by the Deputy Communications Minister, raising concerns over oversight.