Google, Microsoft could turn gatekeepers for advanced AI chips

The US government could designate cloud providers including Google and Microsoft as global gatekeepers for advanced AI chips, a step widely viewed as the latest effort to block China’s access to this critical technology, according to a Reuters report.

The proposed rules, expected to be announced this month, would require these companies to meet strict conditions, such as reporting key data to the US government and ensuring Chinese entities are barred from accessing the chips.

The framework would allow the companies to offer AI capabilities via cloud services internationally without needing an export license, the report added.

Meanwhile, companies without gatekeeper status would need to compete for licenses to import limited quantities of advanced AI chips from Nvidia and AMD in each country.

The report said 19 allied nations, including the Netherlands, Japan, and Taiwan, would be exempt from these caps and granted unlimited access to the chips or their capabilities. Countries under existing nuclear embargoes, including Russia, China, Iran, and Venezuela, would remain barred from it.

Rising trade tensions

Introducing more restrictions could spark tension with some nations, raising questions about their practical implementation and potential ripple effects on global supply chains.

The US has been ramping up efforts to prevent countries like China from gaining access to advanced AI technologies.

Earlier this month, Washington unveiled broad measures targeting China’s semiconductor industry, imposing strict controls on the export of chipmaking equipment and high-bandwidth memory chips crucial for AI development.

In response, China launched an investigation into Nvidia, citing alleged violations of the country’s anti-monopoly laws.

“The US government’s strategy of supporting Google and Microsoft as global AI gatekeepers gives these companies greater influence in international markets,” said Prabhu Ram, VP of Industry Research Group at Cybermedia Research. “By controlling who can access advanced AI chips, they can limit access for countries like China while making it easier for US allies.”

This approach could create a wider technological divide, where a country’s ability to develop cutting-edge AI depends largely on its political alignment with the US, Ram added.

“This strategy also poses challenges for non-US competitors, who may face heightened barriers to integrating advanced AI chips, including delays, compliance burdens, and increased costs,” said Manish Rawat, semiconductor analyst at TechInsights. “Such constraints could hinder innovation and competitiveness in regions outside US influence. This consolidation of control risks reinforcing US market dominance while potentially stifling global AI progress.”

Implications for Big Tech

The move places significant responsibility on companies like Google and Microsoft, effectively positioning them as enforcers of US export controls while maintaining their global competitiveness.

“This seems to be an attempt to balance control and innovation,” said Pareekh Jain, CEO of Pareekh Consulting. “If there are too many restrictions, like requiring licenses for everyone, it might hurt the growth of these companies and the US as an innovation hub. What they are doing is a middle ground – Google and Microsoft won’t require licenses as long as they share information.”

This would ensure their growth won’t be hampered globally. The risk of entities misusing the technology is mitigated through voluntary disclosures, without completely restricting the companies, Jain added.

This is significant because, despite US efforts to restrict China’s access to AI technology, these measures have not been entirely effective. For instance, while OpenAI is blocked in China, users have found ways to access it through Microsoft’s Azure platform.

From an enterprise perspective, restrictions on AI chip access may disrupt supply chains, hinder innovation, and limit market potential.

“Enterprises in restricted countries could struggle to deploy AI solutions globally, diminishing their competitiveness,” Rawat said. “Over time, nations affected by these restrictions may shift investments toward domestic AI chip production or seek new partnerships, challenging US dominance.”