Smith’s letter emphasizes that Microsoft plans to spend $80 billion building AI infrastructure globally this year alone, with more than half in the US. However, he argued the company’s ability to continue investing at this level depends partly on exporting technology services, which requires building AI infrastructure in other countries.
Industry analysts said these tensions will reshape the global semiconductor landscape.
“While the restrictions aim to curb China’s access to the most powerful semiconductors, they will trigger a race for self-sufficiency, driving more diverse and decentralized innovation globally,” said Everest Group’s Udupa.
“Already, Chinese firms such as Huawei and SMIC have not only invested heavily to improve their technological capabilities with state support but have achieved significantly improved yields of AI chips,” he said. “The alienation of additional countries from accessing US chips is likely to result in these countries opting for alternatives from countries like China and Korea — even though they may not be the most technologically advanced and cutting-edge chips out there.”
Singapore’s Foreign Minister has recently vowed to enforce multilateral export control regimes, saying the city-state will not tolerate “evasion, deception, false declarations or miscounting.” The ongoing fraud investigation demonstrates the growing stakes in global AI chip distribution as countries and companies position themselves in the evolving AI landscape.
