Microsoft has called on the Trump administration to ease export restrictions on artificial intelligence chips. President Smith of Microsoft said, “If the regulation remains unchanged, it will serve as a gift to China’s rapidly growing artificial sector.” Microsoft’s Vice Chairman and Company President Brad Smith penned a blog post titled “The Trump administration can avoid making a strategic misstep in the global AI race.” The post highlighted the ongoing high-stakes race that will determine which country will power the burgeoning artificial intelligence economy.

The post argued that if a regulation introduced in the last days of the Biden administration is not modified, it could hinder the U.S. from taking the lead in this race. It recalled how the regulation limited the export of essential artificial intelligence components to many markets and how it undermines the Trump administration’s priorities of strengthening U.S. leadership in AI and reducing the country’s approximately $1 trillion trade deficit.

The post suggested that leaving this rule intact would give China a strategic advantage in spreading its own artificial intelligence technology over time, akin to its rapid rise in the 5G domain a decade ago. While it acknowledged the need to safeguard national security by preventing rivals from acquiring advanced AI technology, the post contended that the rule went beyond what was necessary, stifling American technology companies’ ability to construct and expand AI data centers in many important allied countries.

Highlighting the unexpected consequences of this regulation on countries like Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, United Arab Emirates, and Saudi Arabia, where many American allies host significant data center operations for Microsoft and other U.S. companies, the post warned of the potential shift of these nations toward non-U.S. locations for AI infrastructure and services if the rule remains unchanged. It concluded that such a scenario would be a gift to China with its rapidly growing artificial sector, as continuing to export technology services plays a crucial role in sustaining growth and investment opportunities, underscoring that the regulation’s obstruction of exporting world-leading chips and technology services should be viewed as an economic opportunity.