Microsoft Urges Trump Administration to Reconsider AI Chip Export Restrictions

Microsoft warns Trump against 'strategic misstep' in AI race

Microsoft has called on President Trump to ease export restrictions on crucial computer chips needed for AI technology. The previous Biden administration implemented a cap on the export of American AI components to many foreign markets, amid concerns for national security, and while these restrictions are as yet unchanged by the Trump administration, Microsoft has warned the current President that this could give China a 'strategic advantage' in spreading its own AI technology, as emerging markets will be forced to turn away from the states for advanced technologies. The limits, Microsoft argues, undermines two key priorities for US foreign policy; strengthening the US's leadership in AI technologies, and reducing the country's trade deficit. It says allies of the US were also affected by the restrictions, like Taiwan, South Korea, India, and Switzerland. The export restrictions "go beyond what's needed", and puts these allies in a "Tier Two category and imposes quantitative limits on the ability of American tech companies to build and expand AI datacenters in their countries". "The unintended consequence of this approach is to encourage Tier Two countries to look elsewhere for AI infrastructure and services," Microsoft noted in its statement. "And it's obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China's rapidly expanding AI sector." The US and China are engaged in a 'chip war', with China declaring US chips unsafe, urging companies to use domestic semiconductors, with both nations racing to develop and build high-powered chips domestically. Earlier in 2025, Microsoft revealed plans to spend $80 billion on AI data centers, with a large component of this plan focusing on export power. In 2024, Microsoft also pledged over $35 billion in investments across 14 countries to build AI and data center infrastructure, and has reiterated that the US needs to cooperate with "allies and friends" to maintain its position at the top.

Microsoft calls on Trump to loosen AI chip export restrictions

Microsoft is calling on the Trump administration to loosen Biden-era restrictions on artificial intelligence (AI) chip exports that it argues could undermine U.S. leadership on the technology. The AI Diffusion Rule, announced in the final days of the Biden presidency, placed caps on chip sales to most countries around the world, exempting a narrow list of 18 U.S. allies and partners. "As drafted, the rule undermines two Trump administration priorities: strengthening U.S. AI leadership and reducing the nation's near trillion-dollar trade deficit," Microsoft vice chair and president Brad Smith said in statement. "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," he continued. Microsoft warned the AI Diffusion rule "goes beyond what's needed" and puts important U.S. allies into a second-tier category, making it more difficult to build AI datacenters in these countries. The tech giant pointed to Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia, where it and other American companies have significant datacenter operations. "The unintended consequence of this approach is to encourage Tier Two countries to look elsewhere for AI infrastructure and services," Smith added. "And it's obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China's rapidly expanding AI sector." The AI Diffusion Rule was the latest in a series of actions taken by the Biden administration to limit China's ability to obtain advanced AI chips made by American companies. President Trump has sought to break from his predecessor on AI, emphasizing innovation and lighter regulation. On his first day in office, Trump rescinded former President Biden's executive order on AI that sought to address risks associated with the technology. Vice President Vance carried this message to the AI Action Summit in Paris earlier this month, where he slammed "excessive regulation" that "could kill a transformative industry just as it's taking off." However, the Trump administration has so far not walked back the Biden administration's various restrictions on AI chip sales, including the AI Diffusion Rule, which faced significant pushback from the semiconductor industry when it was announced last month. Commerce Secretary Howard Lutnick also spoke out against allowing the Chinese government and businesses to build their AI systems using U.S. technology. "We need to drive our innovation, and we need to stop helping them. You know, open platforms -- Meta's open platform let DeepSeek rely on it. Nvidia's chips, which they bought tons of, and they found their ways around, drive their DeepSeek model. It's got to end," Lutnick said during his confirmation hearing before the Senate Commerce Committee. "If they are going to compete with us, let them compete, but stop using our tools to compete with us." Lutnick oversees the Bureau of Industry and Security (BIS), the Commerce Department agency responsible for implementing import and export bans, along with other national security-related trade rules. Microsoft noted Thursday that it supports "the need to protect national security by preventing adversaries from acquiring advanced AI technology" and suggested that other elements of the rule should remain. "This puts the opportunity for the Trump administration in bold relief," Smith said. "It can take an overly complex rule that requires 41 pages in the Federal Register and right-size it. Make it simpler. Stop relegating American friends and allies into a second tier that undermines their confidence in ongoing access to American products."

Microsoft asks Trump to loosen chip export limits to avoid giving China an AI advantage

Microsoft urged the Trump administration to change Biden-era limits on chip exports, warning that provisions of the regulations could give China an advantage in the global AI race if allowed to remain in effect. In a post Thursday morning, Microsoft President Brad Smith wrote that the Biden administration's interim final AI Diffusion Rule "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 datacenters in their countries." Examples cited by Smith include Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia, where Microsoft and other large tech companies have major data centers. "The unintended consequence of this approach is to encourage Tier Two countries to look elsewhere for AI infrastructure and services," Smith wrote. "And it's obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China's rapidly expanding AI sector." He drew parallels to the manner in which China was able to spread its 5G technology throughout the world, raising security concerns for the U.S. and its allies. The Wall Street Journal, citing unnamed people familiar with the matter, reported that the Trump administration is considering changes to the rule. Nvidia, the leading AI chipmaker, previously spoke out against the rules, saying they would "weaken America's global competitiveness, undermining the innovation that has kept the U.S. ahead."

Microsoft asks Trump to ease AI export curbs

Rule hamstringing our datacenters is 'gift' to Middle Kingdom, vice chair argues Microsoft would like the Trump administration to row back AI export restrictions introduced by his predecessor that affect countries where the cloud services giant has datacenters. In a blog post on the company's website, president and vice chair Brad Smith claimed that regulations brought in just before the end of the previous administration risk undermining America's ability to succeed in the emerging global AI economy. "The Biden administration's interim final AI Diffusion Rule caps the export of essential American AI components to many fast-growing and strategically vital markets. As drafted, the rule undermines two Trump administration priorities: strengthening US AI leadership and reducing the nation's near trillion-dollar trade deficit," Smith wrote. Left unchanged, the rule would give China a strategic advantage in spreading its own AI technology over time, he warned. The rule, understood to take effect 120 days from its publication in January, establishes caps on the volume of AI-focused chips that can be sold to most countries, as well as measures intended to restrict the transfer of weights for advanced AI models to non-trusted countries. It also affects nations based on the Biden administration's assessment of their trustworthiness, with a select group including Japan, UK, South Korea, and the Netherlands effectively exempt, while Singapore, Israel, Saudi Arabia, and the United Arab Emirates face caps. States such as Russia, China, and Iran are blocked completely. Microsoft takes issue with these measures because the caps affect countries where it operates datacenters, potentially limiting the availability of GPUs and other infrastructure. "The Biden rule goes beyond what's needed," Smith said. "It puts many important US allies and partners in a Tier Two category and imposes quantitative limits on the ability of American tech companies to build and expand AI datacenters in their countries." Smith added: "This includes many American friends, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia. These are countries where we and many other American companies have significant datacenter operations." So, the restrictions are bad, not because they might be unfair or insulting to the countries concerned, but because they might affect the ability of Microsoft and American companies to do business. OK, Brad. This Tier Two status undermines customer confidence in Microsoft's ability to provide the AI computing capacity they need, he asserted, potentially driving affected countries to seek AI infrastructure and services elsewhere. "And it's obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China's rapidly expanding AI sector," Smith claimed. Microsoft isn't the only US tech giant pushing back against these rules. In an interview with Bloomberg, Amazon chief Andy Jassy said: "I don't know how this administration feels about it, but I would say that we share the concern that it has limitations on certain countries who are natural allies of the US." "They're going to need more chips, and so I think if we don't do it, we're going to basically give up that business and those relationships to other countries, who can provide those chips," he added. GPU megacorp Nvidia also criticized the legislation when it was announced, saying that the new rule "threatens to squander America's hard-won technological advantage." "Rather than mitigate any threat, the new Biden rules would only weaken America's global competitiveness, undermining the innovation that has kept the US ahead," VP of government affairs Ned Finkle said at the time. We asked the US Department of Commerce whether it plans to revisit the AI Diffusion Rule and are awaiting a response. ®

Microsoft urges Donald Trump to rethink AI chip export controls

Microsoft has warned Donald Trump's administration it risks making a "strategic mis-step" if it pushes ahead with export controls on artificial intelligence chips, which will push allies to use Chinese technology instead. Brad Smith, Microsoft's president, on Thursday said the US president should not go ahead with export controls on chips that are used to train and run AI models because they would adversely impact allies such as Israel, India and Singapore. He said strictures, announced in the final days of Joe Biden's administration and intended to come into force in May, would cause dozens of countries facing caps on American AI chips to buy from China. "As drafted, the rule undermines two Trump administration priorities: strengthening the US AI leadership and reducing the nation's near trillion-dollar trade deficit," Smith wrote in a blog post titled "The Trump administration can avoid a strategic mis-step in the AI global race." He added: "Left unchanged, the Biden rule will give China a strategic advantage." The Trump administration's "America first" agenda, which includes the threat of tariffs on trading partners, poses a significant risk to the US tech sector, which relies heavily on chip manufacturing in Taiwan. Smith, an influential voice in Washington, has struck a conciliatory tone with the new administration and last month he and chief executive Satya Nadella met Trump at his Mar-a-Lago resort. The "AI diffusion" export controls, introduced in the last days of Biden's presidency, create a three-tier licensing system for AI chips used in data centres, such as Nvidia's powerful graphics processing units. They are aimed at making it harder for Chinese companies to circumvent US export controls by accessing them via third countries. The legislation imposes a cap on chip export volumes for all but a small number of countries, which include G7 members and Taiwan. More than 100 countries fall into this "middle" tier. The EU, Nvidia and the wider chip industry have criticised the rules, which are now in an industry feedback period. The rule, Smith said, "goes beyond what's needed" by putting "quantitative limits on the ability of American tech companies to build and expand AI data centres in their countries", presenting "a gift to China's rapidly expanding AI sector". Huawei, for example, has been rolling out its latest Ascend 910C processors, with the Chinese government urging local companies to shift away from Nvidia's chips. Nvidia sells less powerful versions of its popular AI chips in China, in compliance with export controls. Microsoft has pledged to spend about $80bn on capital expenditure this year. It also outspent rival hyperscalers acquiring chips and graphics processing units in 2024, laying out about $20bn compared with Google's $14bn and Amazon's $8bn, according to New Street Research. On Wednesday, Nvidia's chief financial officer Colette Kress told the Financial Times the company was engaging with the Trump administration but it was "not exactly sure what the administration will do" in relation to the AI diffusion rule.

Microsoft Urges Trump To Avoid This Critical Mistake In The Global AI Race. Cautions It Will 'Give China A Strategic Advantage' - Microsoft (NASDAQ:MSFT)

Microsoft Corporation MSFT has cautioned the Trump administration that the Biden-era "AI Diffusion Rule," might inadvertently strengthen China's rapidly expanding AI sector. What Happened: In a company blog, Brad Smith, the Vice Chair & President of Microsoft highlighted the issues related to the AI Diffusion Rule. In the last days of Joe Biden's administration, the U.S. government announced tighter restrictions on AI chip and technology exports, aiming to retain advanced computing power within the country while expanding efforts to limit China's access. However, it also classifies many significant U.S. allies and partners as Tier Two, restricting U.S. tech firms' capacity to construct and grow AI data centers in these nations. The countries affected include Poland, Switzerland, Greece, Singapore, Indonesia, India, Israel, the UAE, and Saudi Arabia. Microsoft expressed concern that this could result in an unexpected outcome: prompting Tier Two nations to explore other options for AI infrastructure and services, possibly to the advantage of China's AI sector. "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," stated the Satya Nadella-led company. The tech behemoth also pointed out the irony of the situation, as the rule discourages what should rather be considered an American economic opportunity - the export of cutting-edge chips and advanced technology services. It further proposed that the Trump administration could take advantage of this opportunity to simplify the rule, ensuring it does not erode the trust of American allies or disrupt a well-functioning economic market. SEE ALSO: Activist Investor ValueAct, Once Linked To Steve Ballmer's Microsoft Exit, Bought Meta, Visa, Sold Spotify In Q3: A Smart Bet? Why It Matters: This development comes in the wake of President Donald Trump reportedly considering stricter measures on China's semiconductor industry, a move seen as an extension of efforts initiated under the former President Joe Biden administration to curb China's technological advancement. Microsoft's Smith told the Wall Street Journal these restrictions will have a substantial negative impact on the U.S. economy by discouraging other countries from engaging in business with the U.S. Smith believes that startups like DeepSeek, offering cutting-edge AI models at a much lower chip cost, have strong potential to provide an alternative in such a situation. According to the Wall Street Journal on Thursday, the Trump administration officials are considering measures to tighten restrictions while streamlining export-control regulations. READ MORE: SoundHound AI Says Polaris Speech Recognition Model Outperforms Google, OpenAI: Company Forays Into Energy Sector With 7-Figure Deal Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. MSFTMicrosoft Corp$392.00-0.14%OverviewMarket News and Data brought to you by Benzinga APIs

Microsoft is pushing back against the U.S.'s planned new AI-chip restrictions, WSJ reports

Microsoft (MSFT+0.46%) will publish a blog post today asking the Trump administration to loosen and simplify a planned new system that would limit the access of the latest American AI chips in most of the world, arguing the changes may push allies toward Chinese suppliers instead, the WSJ reported. Beijing is already using the proposed rules to argue that it's a more-reliable long-term parter than the U.S. for AI infrastructure, the newspaper said, citing Microsoft President Brad Smith. "That is not good for American business or American foreign policy." The changes were proposed by the Biden administration and are now being reviewed by President Donald Trump's officials. They're considering strengthening the restrictions while simplifying the export-control rules, the Journal said, citing people familiar with the matter. Microsoft favors locking China out of access to the Chips, Smith said. The company has identified seven Chinese AI startups with strong potential, including DeepSeek, Smith told the Journal. In January, the White House said the National Security Council was reviewing DeepSeek's potential national security implications and pledged to "restore American dominance" in AI development.

Microsoft pushes Trump to revise Biden's last-minute AI chip rule

Microsoft is pushing the Trump administration to change last-minute export controls implemented by Joe Biden on his way out of office that were largely designed to limit access to advanced AI chips so that less surplus could find its way into the hands of China or other foreign adversaries. Considered critical for US national security, the AI Diffusion rule divides the world into three tiers. At the top are countries that can access US-made AI chips without restrictions, including key chip ally Taiwan and 17 other countries. Access is completely restricted for about 20 countries in the bottom tier, including China, Russia, and North Korea. But stuck in the middle tier are 150 countries that must endure artificial limits on computing supply chains that are kept at least a generation behind US technology accessible by the top tier. In a Thursday blog, Microsoft President Brad Smith warned that the rule will hurt US businesses by placing heavy restrictions on some of America's "friends" -- including countries like Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia. He cautioned that the rule makes "uncertain" their "ability to buy more American AI chips in the future," and this will inevitably force US allies to seek supply chains outside the US. And "it's obvious where they will be forced to turn" if Trump doesn't intervene, Smith suggested. "If left unchanged, the Diffusion Rule will become a gift to China's rapidly expanding AI sector," Smith wrote. Trump has until mid-May to revise the rule, and it seems likely that Microsoft's plea won't fall on deaf ears. Sources linked to the Trump administration told The Wall Street Journal that Trump's team is currently fielding industry feedback and "weighing steps to strengthen the restrictions while simplifying the export-control rules," the sources said. Experts agree with Microsoft For Microsoft, the rule could threaten its business in countries like Poland, where Smith confirmed he just struck a $700 million deal to expand Microsoft's datacenter infrastructure. Around the world, Microsoft plans to invest $80 billion to build AI infrastructure in 2025 alone, like many other tech companies committing to "unprecedented" levels of AI investments to keep the US ahead in the AI race. Microsoft clearly wants assurances that these plans won't be disrupted if allies cannot easily access even older versions of US-made advanced AI chips. The nonpartisan nonprofit Brookings Institute analyzed the rule back in January and neatly summarized the tension prompting Microsoft's pushback, saying: The US government will subject the approximately 150 middle-tier countries to an artificial scarcity of US-supplied advanced computing chips, and then will anoint a small set of US companies to dole a limited number of these chips out to entities concentrated in a few of those countries. Critics have suggested that startups will struggle under the AI rule and may even have to pay more for advanced chips than big companies, which are more likely to be granted leniency. In many ways, the rule also "undermines" other Trump priorities, like reducing the national deficit and promoting the US as a global AI leader, Smith said. If the rule comes into force unchanged, Smith warned, Trump risks setting the US up to lose the global AI race by giving China a "strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecommunications a decade ago." Importantly, the Brookings Institute noted that countries broadly blocked from US chips didn't just risk stifling their own AI progress but also "their broader efforts to advance their computing infrastructure more generally, with impacts that will cascade across nearly every sector of society." Because of the risks of alienating so much of the world by clamping down on their access to computing technologies, the Brookings Institute has urged that "a far better approach would be to shelve" the rule rather than revise it. "Countries including Brazil, India, Israel, and the UAE are eminently capable of ramping up investments aimed at securing new ways to access increased computing capacity," the Brookings Institute said. "Preventing companies in middle-tier countries from relying on the US to supply computing chips is a surefire way to push them into building non-US alliances that include stronger technology ties with China." The rule could also complicate the global AI landscape in ways the US may not anticipate, the Center for Strategic and International Studies (CSIS), a bipartisan, nonprofit policy research organization, forecast last week. It could "breed resentment, not cooperation" in tier-two countries that will likely "bristle at the fact that their AI ambitions depend on Washington's goodwill and that they are being deliberately kept a generation behind the frontier," CSIS wrote. And it could drive more open source AI like DeepSeek to be key to development in tier-two nations, perhaps further endangering US global leadership in AI, CSIS suggested. "Ironically, the AI Diffusion Framework, meant to lock in American advantage, may instead midwife the very outcome it sought to prevent -- an alternate AI stack and increased open-source development where China, as its most prolific contributor, emerges as the de facto leader," CSIS reported. China wooing countries targeted by rule, Microsoft says But according to Smith, some parts of the rule should be preserved, like datacenter restrictions, including "qualitative provisions" that "ensure that AI technology components are deployed in certified, secure, and trusted datacenters." That part of the rule, Smith suggested, "helps reduce the risk of chip diversion to China." And other parts of the rule can be strengthened, Smith wrote, such as ensuring the Commerce Department has resources to enforce it and "expedite approvals" for any countries in the middle tier who may appeal to either move into the top tier or limit tier-two restrictions. But overall, Trump needs to "make it simpler," Smith urged. "Stop relegating American friends and allies into a second tier that undermines their confidence in ongoing access to American products," his blog said. "Eliminate the quantitative caps that would interfere with a well-functioning economic market. And keep what matters most, such as the qualitative security standards and AI use restrictions that protect national security." In an interview, he told the WSJ that China is already "using the proposed rule to argue to other countries that it would be a better long-term partner for AI infrastructure than the US." That could quickly become a problem since Smith told the WSJ that DeepSeek -- which blindsided US officials by unleashing an AI model rivaling the Microsoft-funded OpenAI o1 model in January -- is just one of seven Chinese startups on Microsoft's radar. While the Trump administration appears ready to revise the rule, CSIS suggested that his team's review could yield another outcome. "Of course, the United States may believe that the risk of AI proliferation is so severe, and the timeline to artificial general intelligence so short (2-3 years), that the cost of alienating T2 nations is an acceptable trade-off," CSIS noted. "But if the United States is trying to consolidate long-term control over the global AI stack, this approach may be too heavy-handed and self-defeating."

Microsoft urges the elimination of quantitative caps, supports measures to protect national security in AI race By Investing.com

Investing.com -- Microsoft (NASDAQ:MSFT) has publicly expressed its support for measures to protect national security by preventing potential adversaries from acquiring advanced Artificial Intelligence (AI) technology. The tech giant highlighted the importance of such precautions in a recent blog post. Microsoft also noted key elements in the Biden administration's 'AI Diffusion Rule' that it believes should be maintained. The AI Diffusion Rule, an interim final rule under the current administration, places many significant U.S. allies and partners in a category labeled 'Tier Two'. In a message to the Trump administration, Microsoft urged the elimination of quantitative caps that could disrupt a well-functioning economic market. The company believes that such restrictions could potentially hinder market dynamics and economic growth. The 'Tier Two' categorization in the AI Diffusion Rule has raised concerns for Microsoft. The company suggests that this classification could undermine the confidence of American allies in their ongoing access to American products. This is a critical issue for Microsoft, as the company has a broad international market and maintaining good relations with its partners is paramount for its business operations.

Microsoft Urges Trump Administration to Relax Chip Export Curbs

Microsoft Corp. President Brad Smith is urging the Trump administration to rethink regulations that would cap the export of artificial intelligence chips to "strategically vital markets" including Israel and Switzerland. Introduced by the Biden administration, the proposed system puts several US allies in the second tier of a three-tier category that curbs the export of chips used in data centers to train AI models. Smith said the policy could prompt other countries to turn to China for advanced chips.

Microsoft will urge Trump to overhaul curbs on AI chip exports, WSJ reports

Feb 27 (Reuters) - Microsoft will call for U.S. President Donald Trump's team to ease the limits on chips that can be used in data centers for training AI models so they no longer apply to a group of U.S. allies, including India, Switzerland and Israel, the Wall Street Journal reported on Thursday. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Trump wants tighter AI chip export restrictions but may face staffing shortage and other issues

The Trump administration is looking to tighten restrictions on exports of advanced AI processors from the country as well as persuade allies in Japan and the Netherlands to make Tokyo Electron and ASML stop servicing their tools installed in China, reports Bloomberg. While the move will certainly make the lives of Chinese chipmakers harder, it will affect U.S. allies and not in a good way. When President Joe Biden was prepping to leave the White House in early January, his administration proposed its final set of export restrictions on advanced AI processors. Under the new guidelines, called the AI Diffusion Rule, only entities from the U.S. and 18 allies (Tier 1 countries) can obtain powerful AI processors -- such as Nvidia's H100 GPUs -- without limits. Other foreign entities (Tier 2 countries) will have restricted access to AI GPUs unless they secure validated end user (VEU) status. Countries under arms embargoes (Tier 3 countries), including China, Russia, and Macau, will be almost entirely prohibited from importing AI GPUs. Trump's government is reviewing this framework to streamline and reinforce its efficiency, according to the report. Under the Biden's AI Diffusion Rule, companies from Tier 2 countries can get up to 1,700 Nvidia H100 GPUs (or equivalent) without any export license. These orders will also do not count toward the national AI processor limit of around 50,000 units. One proposed change is reducing the number of AI chips that can be exported without government approval (i.e., from 1,700 to a lower number). Some people in the government want to lower this threshold and increase oversight over AI processors exports. The move will not be exactly welcome by the industry as tech industry leaders were pushing back against AI Diffusion Rule restrictions. Nvidia's CEO, Jensen Huang, has expressed optimism that the Trump administration would adopt a more flexible approach. Companies worry that stricter limits on chip exports could harm business interests while encouraging Chinese firms to develop domestic alternatives faster. Officials from the U.S. government have held meetings with representatives from Japan and the Netherlands to push for restrictions on maintenance services for semiconductor manufacturing equipment in China. The goal is to prevent companies like Tokyo Electron and ASML from servicing chipmaking tools in China, mirroring U.S. restrictions on domestic firms such as Applied Materials, KLA, and Lam Research. Without regular maintenance, tools from ASML and Tokyo Electron can quickly become obsolete. If allies agree to U.S. demands, Chinese semiconductor production could face serious disruptions. However, ASML and TEL will also lose tens of millions of dollars that Chinese companies pay for their services. In addition, there are discussions underway in Washington about imposing sanctions against specific Chinese semiconductor firms. One proposal targets ChangXin Memory Technologies (CXMT), a company that was considered for restrictions by the previous government, but was spared due to Japan's opposition. Trump officials are now revisiting the possibility of blocking it from acquiring American chipmaking tools completely by adding it to the U.S. Department of Commerce Bureau of Industry and Security's (BIS) Entity List. The administration is also looking to impose tighter restrictions on Semiconductor Manufacturing International Corp. (SMIC), which makes chips for blacklisted Huawei. Biden had restricted shipments to certain SMIC facilities while allowing case-by-case reviews for others. However, this approach allows SMIC to obtain U.S. tools that could be transferred from one facility to another to support production of processors on advanced nodes. Despite these plans, it may take several months before any new regulations take effect. Trump's administration is still in the process of staffing key federal agencies, and allies may not immediately support these initiatives. To that end, Biden's AI Diffusion Rule will come into effect on May, whereas ASML and TEL will continue to service their tools at Chinese fabs.

Trump officials urge allies to limit chip exports to China after...

The Trump administration is looking to expand a crackdown on China's access to computer chips -- an effort first started under the Biden administration -- and is urging allies to strengthen their restrictions after DeepSeek's rise spooked US investors, according to a report. The White House recently met with Japanese and Dutch officials to discuss keeping engineers at major chip firms Tokyo Electron Ltd. and ASML Holding NV from maintaining semiconductor gear at production facilities in China, according to Bloomberg. Trump officials are hoping key allies will match the limits the US has placed on its own companies, including Lam Research Corp., KLA Corp. and Applied Materials Inc., the report said. There have also been early talks in Washington about placing sanctions on certain Chinese companies, sources told Bloomberg. Some Trump officials are also discussing stronger restrictions on Nvidia chip exports, some people told Bloomberg. Shares of Nvidia, which reports earnings on Wednesday, were down 1%. Tokyo Electron shares slid about 4% on Tuesday morning. Trump's team did not immediately respond to a request for comment. With a week left in his term, Biden had proposed new rules to clamp down on chip exports to China. "If it's China and not the United States determining the future of AI on the planet, I think that the stakes of that are just profound," Jake Sullivan, Biden's national security adviser, said in January. Officials made it clear it would be up to Trump to follow through or drop the more restrictive approach, which Sullivan said "shouldn't be a partisan issue at all." Semiconductor giants have argued that stronger restrictions would hamper business and set them behind globally. But Chinese firms have seemingly found ways to skirt around the US' current restrictions, boosting the argument for tougher rules. US officials are currently investigating whether China-based DeepSeek - which shook the stock market and threatened American dominance in the artificial intelligence race - bought Nvidia chips through third parties in Singapore, Bloomberg earlier reported. It could take months before the early-stage talks lead to any new regulations. It's also unclear how allies will respond to the Trump administration compared to Biden. The Biden administration had secured a handshake agreement with Dutch officials to limit gear maintenance in China. Without regular maintenance, chip-making equipment can quickly lose the ability to produce semiconductors and turn obsolete. But the Netherlands pulled back on the curbs after Trump won the election, two senior Biden officials said. Biden's team passed on several other priorities to the Trump administration, like a proposal to block Chinese memory chipmaker ChangXin Memory Technologies from buying American tech, according to the report. Some Trump officials also want tougher restrictions on Semiconductor Manufacturing International Corp., which is smartphone maker Huawei's main chipmaking partner. Huawei last year overtook Apple's share of the phone market in China. The new administration is also tackling an AI diffusion rule imposed during Biden's final week in office. The export control divided the world into three tiers of countries, setting different maximum export levels for each tier. Industry giants, including Nvidia, slammed the rule, which they argued showed too much regulatory oversight.

Trump team seeks to toughen Biden's chip controls over China

Donald Trump's administration is sketching out tougher versions of U.S. semiconductor curbs and pressuring key allies to escalate their restrictions on China's chip industry, an early indication the new U.S. president plans to expand efforts that began under Joe Biden to limit Beijing's technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron and ASML engineers from maintaining semiconductor gear in China, according to people familiar with the matter. The aim, which was also a priority for Biden, is to see key allies match China curbs the U.S. has placed on American chip-gear companies, including Lam Research, KLA, and Applied Materials. The meetings come in addition to early discussions in Washington about sanctions on specific Chinese companies, other people said. Some Trump officials also aim to further restrict the type of Nvidia chips that can be exported to China without a license, Bloomberg News has previously reported. They're also having early conversations about tightening existing curbs on the quantity of AI chips that can be exported globally without a license, said some of the people, who asked not to be identified because the deliberations are private.