Microsoft urges Trump to ease AI chip restrictions on Israel and allies
Tech giant warns restrictions could push key partners toward Chinese alternatives.
Microsoft has urged President Donald Trump’s team to ease export restrictions on artificial intelligence chips, which were imposed in the final days of the Biden administration, arguing that the measures should not apply to a group of U.S. allies.
In a blog post published on Thursday, the tech giant stated that these rules disadvantage allies—including Israel, India, and Switzerland—while also limiting the ability of U.S. tech companies to build and expand AI data centers in these countries.
Tighter U.S. restrictions on the export of advanced AI chips to Beijing are preventing American chipmakers and Big Tech companies from serving one of the largest markets for semiconductors, accelerating the global race for AI infrastructure dominance.
Market leader Nvidia, whose AI chips power applications such as OpenAI’s ChatGPT, could be among the hardest hit by these restrictions, following prior measures that already limited the export of most of its graphics processors to Beijing.
In its final days, the Biden administration announced further restrictions on AI chip and technology exports, dividing the world into tiers to keep advanced computing power within the U.S. while expanding efforts to block China’s access.
However, Microsoft warned that such restrictions could unintentionally give Beijing a competitive edge in the AI race by forcing some U.S. allies to turn to Chinese technology in the absence of sufficient American supply.
“If left unchanged, the Biden rule will give China a strategic advantage in spreading its own AI technology over time, echoing its rapid ascent in 5G telecommunications a decade ago,” Microsoft said.
While sanctioned telecommunications giant Huawei and other Chinese firms have struggled to match Nvidia in developing high-end chips, analysts say Chinese startup DeepSeek’s inference-focused, low-cost models could create an opening in the market.
Microsoft further warned that the sweeping restrictions introduced in January “will become a gift to China’s rapidly expanding AI sector.”
According to the Wall Street Journal, which first reported on Microsoft’s proposals earlier on Thursday, Trump administration officials are considering steps to strengthen the restrictions while simplifying export-control rules.
Microsoft is one of the leading players in generative artificial intelligence (GenAI), thanks to its close partnership with OpenAI. The company operates significant AI research and development centers in several countries, including Israel. Free and global access to computing power for AI development and deployment is critical to its operations.
The Trump administration is currently reviewing the Biden-era regulations. According to Microsoft President Brad Smith, the company supports certain aspects of the policy, including the full export ban on tier-three countries and some elements of the licensing system for tier-two countries.
