MIDF Research said on Friday that removing the rules in the AI Diffusion Framework is a good thing for the data center industry.
“First, we think tech giants will face fewer restrictions on how they share artificial intelligence (AI) computing power.”
“This means the US-based hyperscalers may no longer be tied down to the 7 percent restriction of AI computing power to any country outside Tier 1, which allows for more AI capacities to be planned in other countries such as Malaysia,” the research house said in a note.
MIDF said how the government-to-government (G2G) talks for Malaysia will decide the country’s share.
The AI Diffusion Rule says that countries will have a maximum limit of 790 million total processing power (TPP) for their installations.
“Under certain conditions, this limit can be doubled to 1.58 billion processing power (TP). Using Nvidia’s H100 chips as a reference, this would equal 49,899 and 99,798 chips, respectively.”
“There is no clarity on whether this would be repealed, but news reports have mentioned that the Trump administration intends to impose curbs on countries that have diverted chips to China, including Malaysia and Thailand,” the research house said.
While waiting for more details on how the Trump administration will change the AI Diffusion Rule, MIDF sees it as a positive sign for now since the earlier rule set by Biden won’t be enforced on May 15.
Removing the 3-tier country system will help tech giants plan their AI data center allocations more easily, without the previous restrictions,
It’s noted that the Trump administration plans to remove some AI chip limits that former President Joe Biden set before he left office, known as the Framework for AI Diffusion.
The framework was supposed to start on May 15, but reports say the Trump administration will not enforce it on that date and is working on its version of the rules.
Bloomberg reported that this would likely focus on direct negotiations with nations like the United Arab Emirates (UAE) or Saudi Arabia, In contrast, Reuters reported a week ago that Trump’s officials may remove the 3-tier country system, replacing it with a licensing regime based on G2G agreements.
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