Microsoft (MSFT) has called on President Trump to avoid a “strategic misstep” in the global AI race and ease the export curbs on U.S. chips which can be used in data centers for training AI models.
U.S. Could Lose “High-Stakes Race”
In a statement on its blog today authored by Brad Smith, its Vice Chair and President, the tech giant said a “high-stakes race is underway that will determine which country will supply the technology that powers the world’s emerging AI economy.” However, it fears that if the Trump administration continues former President Biden’s AI Diffusion curbs on AI exports to fast-growing and strategically vital nations, this will hamper U.S. technological development. It said the rule has already imposed limits on the ability of U.S. tech firms to build and expand AI data centers in countries such as Switzerland, Poland, Greece, Singapore, India, Israel, Indonesia, the UAE and Saudi Arabia.
Under Biden’s rules anounced just before he left office in January, companies like Nvidia (NVDA) and Advanced Micro Devices (AMD) are restricted from selling their advanced graphics processing units (GPUs) to customers in China, Russia, Iran, and North Korea. This also forces cloud computing companies, such as Microsoft, Amazon (AMZN) and Alphabet (GOOGL), to acquire special licenses to create data centers in countries with limited AI chip exports. “Customers in these countries now worry that an insufficient supply of critical American AI technology will restrict their opportunities for economic growth,” Microsoft warned.
Advantage to China
Microsoft fears that left unchanged, the Biden rule will give China a strategic advantage in spreading its own AI technology to these countries and others. Microsoft, which intends to spend $80 billion to build AI infrastructure around the world this year, with 50% of that in the U.S., added that its ability to grow at this level depends in part on being able to export its services.
It said its message to Trump was clear: “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.”
Is MSFT a Good Stock to Buy?
On TipRanks, MSFT has a Strong Buy consensus based on 29 Buy and 3 Hold ratings. Its highest price target is $600. MSFT stock’s consensus price target is $510.38 implying an 27.68% upside.
