ISTANBUL 

A high-stakes race is on to dominate the AI economy, but a regulation implemented by the previous administration of Joe Biden—the interim final AI Diffusion Rule—threatens America’s lead, said Brad Smith, the vice chair and the president of tech giant Microsoft, on Thursday.

The rule limits exports of critical AI components to key markets, including US allies like Switzerland, Poland, and Singapore, placing them in a restrictive category, he explained in a blog post.

Critics, including tech leaders, argue that it undermines US AI leadership and economic growth, potentially giving China a competitive advantage similar to its 5G rise, he claimed.

He stated that while the rule aims to protect national security by securing AI technology in trusted data centers, its broad restrictions may lead allies to seek Chinese alternatives.

Companies like Microsoft, planning an $80 billion AI infrastructure investment this year, warn that the rule hampers exports vital to global supply chains and American jobs, he underlined.

He added that the Trump administration can simplify the rule, remove quantitative caps, and maintain only essential security measures to bolster US competitiveness. "The Trump administration can avoid a strategic misstep in the AI global race."