The News
Microsoft called on Washington to loosen its semiconductor export curbs, warning that the government risked making a “strategic misstep” in the global AI arms race that could push US allies to use Chinese chips.
In a blog post, the tech giant’s president Brad Smith wrote that Beijing is using the rules — designed to limit China’s access to the cutting-edge technology used to power artificial intelligence — to argue that “countries can’t rely on the US, but China is willing to provide what they need.
Under the Biden administration’s AI Diffusion Rule, even US allies such as Switzerland, Singapore and the UAE are subject to caps on the number of chips they can buy, forcing them to look elsewhere for the components needed for AI infrastructure, Smith wrote.
It comes as the Trump administration is looking to introduce even tougher versions of the controls, Bloomberg reported this week.
SIGNALS
US allies may seek to de-risk from Washington, not China
Exponential growth in demand for computing power means Washington faces a dilemma as US and international firms look to expand overseas, because not every AI-friendly jurisdiction is aligned with the US or insulated from China, a trade expert wrote for the Center for Strategic and International Studies. Countries barred from buying the chips they require may bristle at the US holding back their ambitions, and try to de-risk from Washington rather than China, he wrote. And international makers of advanced chips will be “more than happy” to grow their market share at the expense of the US in response to the demand, a tech expert argued for the Brookings Institution.
Counterproductive curbs could boost Beijing instead of reining it in
Washington’s curbs limiting Beijing’s ability to buy chips may have the unintended effect of making China more self-reliant and a key exporter in its own right, tech writer Ben Thompson argued: “The first thing the US should do… is let Chinese companies buy top-of-the-line Nvidia chips,” he wrote. Some analysts, for example, argue that Chinese startup DeepSeek’s recent success shows that US controls aren’t working and may even be “counterproductive,” the South China Morning Post reported. But the picture may be more complicated: DeepSeek spent years stockpiling Nvidia chips before the controls took effect, so had the Biden administration moved more quickly, it may not have been as successful, a tech analyst told The New York Times.