Microsoft urges Trump to overhaul Biden's last AI-chip export curbs

(Reuters) -Microsoft has urged President Donald Trump's team to ease export restrictions imposed on artificial intelligence chips in the closing days of the Biden administration, saying the measures should not extend to a group of U.S. allies.

In a blog post published on Thursday, the tech giant said these rules disadvantaged allies, including India, Switzerland and Israel, and limited the ability of U.S. tech companies to build and expand AI data centers in these countries.

Tighter U.S. restrictions on the exports of advanced AI chips to Beijing are keeping American chipmakers and Big Tech from serving one of the largest markets for semiconductors, accelerating a global race for AI infrastructure dominance.

Market leader Nvidia, whose AI chips power applications such as OpenAI's ChatGPT, could be worst hit by the curbs, after prior restrictions limited exports of most of its graphics processors to Beijing.

In the final days of the Joe Biden administration, the U.S. government said it would further restrict AI chip and technology exports, divvying up the world to keep advanced computing power in the U.S. while finding more ways to block China's access.

Such restrictions could conversely lead to Beijing gaining a leg-up in the AI race, by forcing some allies to turn to the Chinese market in the absence of sufficient supply of U.S. tech, Microsoft said.

"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," the company said.

While sanctioned telecommunications equipment maker Huawei and its domestic peers have struggled to match Nvidia in building top-end chips that could compete with U.S. products, Chinese startup DeepSeek's inference-focused, low-cost models could present an opening, analysts have said.

The Biden administration's sweeping restrictions introduced in January "will become a gift to China's rapidly expanding AI sector", Microsoft said.

According to the Wall Street Journal, which first reported on Microsoft's proposals earlier on Thursday, Trump administration officials are weighing steps to strengthen the restrictions while simplifying the export-control rules.

The White House did not immediately respond to a Reuters request for comment.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath)

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