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

Malaysia’s announcement and quick retraction of plans to deploy Huawei AI technology has highlighted the intensifying technological rivalry between