Microsoft is asking on the Trump administration to loosen Biden-era restrictions on synthetic intelligence (AI) chip exports that it argues might undermine U.S. management on the expertise.
The AI Diffusion Rule, introduced within the closing days of the Biden presidency, positioned caps on chip gross sales to most international locations world wide, exempting a slim listing of 18 U.S. allies and companions.
“As drafted, the rule undermines two Trump administration priorities: strengthening U.S. AI leadership and reducing the nation’s near trillion-dollar trade deficit,” Microsoft Vice Chair and President Brad Smith mentioned in assertion.
“Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecommunications a decade ago,” he continued.
Microsoft warned the AI Diffusion rule “goes beyond what’s needed” and places necessary U.S. allies right into a second-tier class, making it harder to construct AI datacenters in these international locations.
The tech large pointed to Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the United Arab Emirates, and Saudi Arabia, the place it and different American firms have important datacenter operations.
“The unintended consequence of this approach is to encourage Tier Two countries to look elsewhere for AI infrastructure and services,” Smith added. “And it’s obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China’s rapidly expanding AI sector.”
The AI Diffusion Rule was the newest in a collection of actions taken by the Biden administration to restrict China’s means to acquire superior AI chips made by American firms.
President Trump has sought to interrupt from his predecessor on AI, emphasizing innovation and lighter regulation. On his first day in workplace, Trump rescinded former President Biden’s govt order on AI that sought to handle dangers related to the expertise.
Vice President Vance carried this message to the AI Motion Summit in Paris earlier this month, the place he slammed “excessive regulation” that “could kill a transformative industry just as it’s taking off.”
Nevertheless, the Trump administration has to this point not walked again the Biden administration’s varied restrictions on AI chip gross sales, together with the AI Diffusion Rule, which confronted important pushback from the semiconductor business when it was introduced final month.
Commerce Secretary Howard Lutnick additionally spoke out in opposition to permitting the Chinese language authorities and companies to construct their AI programs utilizing U.S. expertise.
“We need to drive our innovation, and we need to stop helping them. You know, open platforms — Meta’s open platform let DeepSeek rely on it. Nvidia’s chips, which they bought tons of, and they found their ways around, drive their DeepSeek model. It’s got to end,” Lutnick mentioned throughout his affirmation listening to earlier than the Senate Commerce Committee.
“If they are going to compete with us, let them compete, but stop using our tools to compete with us.”
Lutnick oversees the Bureau of Trade and Safety, the Commerce Division company chargeable for implementing import and export bans, together with different nationwide security-related commerce guidelines.
Microsoft famous Thursday that it helps “the need to protect national security by preventing adversaries from acquiring advanced AI technology” and urged that different components of the rule ought to stay.
“This puts the opportunity for the Trump administration in bold relief,” Smith mentioned. “It can take an overly complex rule that requires 41 pages in the Federal Register and right-size it. Make it simpler. Stop relegating American friends and allies into a second tier that undermines their confidence in ongoing access to American products.”
