Microsoft (NASDAQ:MSFT) is urging the Trump administration to simplify a new system that would limit the sales of advanced U.S. artificial intelligence (AI) chips globally, the Wall Street Journal reported on Thursday.
The company plans to make this call in a blog post scheduled to be released on Thursday, the report said.
The new system currently restricts the use of these chips in data centers for training AI models to a group of U.S. allies, including India, Switzerland, and Israel. These countries are part of the second tier of a three-tier system that underpins the export controls.
Microsoft officials have voiced concerns that the proposed system could lead these allies to seek tech infrastructure from China due to limited U.S. chip supply.
Microsoft President Brad Smith highlighted in an interview that China is leveraging the proposed rule to position itself as a more reliable long-term partner for AI infrastructure than the U.S.
Smith expressed that this situation is unfavorable for both American business and foreign policy. He noted China’s message to these countries is that they can’t rely on the U.S., but China is willing to provide what they need.
Smith also mentioned DeepSeek, a Chinese company that recently released an advanced AI model, as one of seven Chinese startups Microsoft views as having strong potential.
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