Microsoft Challenges Biden’s AI Export Policy, Seeking Reversal
The tech sector of the stock market currently faces a complex landscape, with many leading companies experiencing downward trends. The ‘Magnificent 7,’ the group of industry giants largely responsible for sector growth, are struggling, adding uncertainty to the market. Companies like Tesla (TSLA), Nvidia (NVDA), and Amazon (AMZN) are among the top tech stocks that have yet to regain their previous momentum.
Brad Smith, Vice Chair and President at Microsoft, is taking action in an attempt to see an AI policy from the previous administration overturned.
Microsoft is taking action to address what it believes is negatively impacting the artificial intelligence (AI) industry’s growth. Microsoft Vice Chair and President Brad Smith is leading the charge in an effort to overturn a policy implemented by the previous administration. The AI Diffusion Rule, which limited AI chip exports, particularly the destinations U.S. companies could send them, was put in place by President Joe Biden towards the end of his term.
This policy sparked concern among U.S. chipmakers, which would bear the brunt of the changes. Ned Finkle, Nvidia’s vice president of government affairs, expressed his company’s opposition to the rule in a blog post, stating that it would not serve the industry’s best interests.
Microsoft is now actively fighting against Biden’s AI policy, with President and Chairman Brad Smith publishing a blog post advocating for former President Trump to reverse the AI Diffusion Rule. Smith argues that the policy could substantially undermine the nation’s global leadership in AI.
“As drafted, the rule undermines two Trump administration priorities,” Smith stated. “Strengthening U.S. AI leadership and reducing the nation’s near trillion-dollar trade deficit. Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecommunications a decade ago.”
Smith also critiqued the rule, noting the multi-tier system it established. He argued that it “puts many important U.S. allies and partners in a Tier Two category” and “imposes quantitative limits on the ability of American tech companies to build and expand AI data centers in their countries.”
Examples of countries affected include India, Saudi Arabia, and the United Arab Emirates (UAE). Smith highlighted that many U.S. companies have data centers operating in these nations. The restrictions placed on these countries impact trade relations involving AI chips.
Vice President JD Vance recently issued a shocking take on U.S. AI policy at the Paris AI Action Summit
Smith noted that the “American tech sector wants to invest in AI computing capacity at an unprecedented level,” citing Microsoft’s $80 billion plan to develop AI infrastructure worldwide. Furthermore, many leading tech companies plan to increase their AI spending in 2025, leading to high capital expenditure figures. Companies like Amazon and Meta Platforms plan to increase AI investments to meet rising demands.
“As the tech sector invests billions of dollars to build data centers around the world, we are developing global supply chains that combine international and American suppliers of more traditional manufactured goods,” Smith explained. He also pointed to Vice President JD Vance’s recent statements at the Paris AI Action Summit as an example of the sector’s approach to AI and why the restrictions must be lifted to ensure continued growth.
