Microsoft warns Trump against ‘strategic misstep’ in AI race

(Image credit: Future)

Microsoft argues against current restrictions on semiconductors
Tech giant wants Trump to loosen export constraints
The US and China are in the middle of an 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.

Semiconductor stipulations

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.

Take a look at our picks for the best cloud storage around
Check out our recommendations for the best AI tools
Microsoft is spending $700 million to ramp up security and computing power in Poland

TOPICS

Ellen has been writing for almost four years, with a focus on post-COVID policy whilst studying for BA Politics and International Relations at the University of Cardiff, followed by an MA in Political Communication. Before joining TechRadar Pro as a Junior Writer, she worked for Future Publishing’s MVC content team, working with merchants and retailers to upload content.