Microsoft chief urges Trump to scrap two-tier AI export policy
Microsoft warns of Biden AI export rules harming US leadership
#USA #Saudi #UAE #exportregs - Microsoft's vice-chair and president Brad Smith has called on the Trump administration to overhaul the Biden administration's eleventh-hour AI export restrictions that limit advanced AI chip sales to key allies such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia. The software giant argues the ‘Diffusion Rules’ inadvertently strengthen China's global AI position by relegating critical US partners to ‘Tier Two’ status with capped access to American AI technology. Microsoft, which plans to invest $80 billion in AI infrastructure this year alone, warns the policy undermines US economic interests and technological leadership.
SO WHAT? - Biden’s new policy on advanced technology export regulations announced in January came at a pivotal moment in the global AI race. Many in the United States are concerned about letting China access cutting-edge American technology that could support the Middle Kingdom’s bid for global AI leadership, However, Microsoft warn that well-intentioned security measures are backfiring strategically. By restricting American companies from building robust AI infrastructure with allied nations - including Saudi Arabia and the UAE - the Biden regulations could create precisely the vacuum China seeks to fill with its own AI technology: potentially replicating China's successful strategy in dominating global 5G infrastructure deployment a decade ago.
Microsoft's vice-chair and president Brad Smith has published a blog post urging the Trump administration to overhaul the Biden administration's eleventh-hour AI export restrictions, removing the Two-Tier system that it introduced.
Smith’s argument is that that to limit advanced AI chip sales to key allies threatens the strategic market position of America’s leading technology companies, sends the wrong message to allies, while making it easier for China to fill the void left by unfulfilled market demand.
Microsoft's president has publicly challenged the Biden administration's last-minute AI export regulations, urging President Trump to simplify the complex 41-page rule while preserving key security provisions.
The contentious ‘AI Diffusion Rule’ places numerous US allies including Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, UAE, and Saudi Arabia in a ‘Tier Two’ category with quantitative limits on AI infrastructure.
Microsoft emphasizes that customer confidence in these markets is being undermined as businesses worry about future access to crucial American AI technology, potentially forcing them to seek Chinese alternatives.
The software giant plans to invest $80 billion in global AI infrastructure this year with more than half on US soil, but warns that continued growth depends on exporting technology services to international markets.
Microsoft highlights the irony that while the Trump administration pushes European countries to purchase more American goods, the Biden rule leaves allies like Poland questioning why they face restricted access to US AI chips.
Smith supports maintaining the rule's qualitative provisions ensuring AI components are deployed in certified, secure datacenters, but objects to arbitrary quantitative caps that distort market-based allocation.
Microsoft argues the current policy paradoxically discourages what should be viewed as an American economic opportunity: the export of world-leading chips and technology services to trusted international partners.
Microsoft’s $1.5 billion investment deal with Abu Dhabi-based AI powerhouse G42 went to great lengths to ensure that G42 was not viewed as a geopolitical risk by the U.S. government, including an Intergovernmental Assurance Agreement between UAE and US governments, and showing demonstrable oversight from the software giant to reassure detractors.
According to the new rules introduced in January, both Saudi Arabia and the UAE are currently subject to import caps on advanced processors and AI accelerators, even after stringent export criteria have been met to secure deal-by-deal approvals from the US government.
ZOOM OUT - Saudi Arabia and the UAE are both committing billions of dollars to become leaders in AI adoption, AI development and AI exports. In order to achieve this, both countries require large numbers of high performance computer processors and AI accelerators to power high performance computing sites and AI-ready data centres. The past three years has seen US export regulations for AI models, AI accelerators and high-end processors (HPC) become more complex and more stringent in their requirements. The impact has been to slow some HPC projects down considerably, forcing some government and private sector customers to lower their specifications and others to rely on HPC systems in the US to provide additional cutting edge compute. With the clarification of US regulations over the past 6-8 months, some projects have been able to move forward and not others. Meanwhile, both the criteria for AI exports and the caps set by the US government remain a concern for buyers and policymakers in the region.
LINKS
Microsoft President Brad Smith’s blog post (Microsoft)
The Whitehouse Fact Sheet on the policy introduced in January (Whitehouse)
[Written and edited with the assistance of AI]