Microsoft is set to publish a blog post on its website Thursday, urging the Trump administration to "loosen and simplify" a new system for exporting AI training chips to allied countries for data center applications. The company emphasizes the need to strike a delicate balance—limiting access to China while ensuring allied nations do not turn to Chinese tech.
In a blog post that is scheduled to be released Thursday, Microsoft will call for Trump's team to ease the limits on chips that can be used in data centers for training AI models so they no longer apply to a group of US allies including India, Switzerland and Israel, company officials said. Those countries are in the second tier of a three-tier system that underpins the export controls.
Microsoft says the unintended consequence of that proposed system would be that allies facing limited US chip supply would turn to China to get the tech infrastructure they need.
Microsoft President Brad Smith told the media outlet via an interview: "Their message is these countries can't rely on the US, but China is willing to provide what they need. That is not good for American business or American foreign policy."
The Biden-Harris administration proposed a series of chip-control rules to limit China's ability to procure advanced AI chips in its first term. The Trump team is reviewing those proposals and will soon provide color on the path forward for US Big Tech.
Microsoft's blog post demonstrates the Trump administration's delicate balance of being not just 'pro-business' but also 'America First' while maintaining strict curbs on China to safeguard national security.
WSJ noted, "In the previous administration, national security officials became frustrated that those sympathetic to businesses selling abroad often delayed or watered down their actions."
One primary national security concern we previously reported is that at least one shell company in India was purchasing Western AI chips and routing them through an Indian pharmaceutical company, which then sold the chips to Russia.
Using public trade data compiled by counterparty and supply chain risk intelligence firm Sayari, we were able to show how the Russians were able to circumnavigate Western sanctions by playing the Indian shell game.
This report comes days after the TD Cowen report on MSFT showed data center cancellations in the US.
Cowen's report was denied by MSFT. Trouble in paradise for MSFT that "bet the farm" on AI?