The Trump administration is reportedly considering tariff exemptions for Amazon, Google, and Microsoft on advanced AI chips. Trump previously imposed a 25% tariff on imports of several advanced microchips, and the new exemptions would apply specifically to semiconductors used in AI data center construction and expansion.
According to Financial Times reports, the Commerce Department would oversee exemptions tied to Taiwan Semiconductor Manufacturing Company's investment commitments. TSMC pledged $165 billion to build semiconductor factories in Arizona, part of Taiwan's broader $250 billion investment plan in US semiconductor manufacturing.
The proposed policy links tariff relief directly to TSMC's production capacity. Companies building new semiconductor plants in the US could export up to 2.5 times their production capacity duty-free during construction. Existing facilities would receive 1.5 times capacity exemptions.
Amazon, Google, and Microsoft have committed massive spending to AI infrastructure this year. Amazon plans $200 billion in capital expenditures for 2026, a more than 50% increase from 2025. Alphabet's Google Cloud division projects $175-185 billion in capex, doubling its budget for the second consecutive year.
Microsoft reported a 66% jump in quarterly capital expenditure to $37.5 billion. The company's Azure cloud platform grew 39% year-over-year, driven by AI workload demand.
The tariff exemptions remain fluid and have not been signed by President Trump, according to administration officials.
"We will monitor with an eagle eye the developments after we released this plan," one official told the Financial Times. "Let me be clear that this is not a free gift to TSMC."
TSMC's Arizona investment represents one of the largest foreign direct investments in US manufacturing history. The company will distribute tariff exemptions secured under US-Taiwan trade agreements to its Big Tech clients, enabling duty-free semiconductor imports.
The scale of duty-free imports depends on TSMC's future US production capacity. The Commerce Department plans to monitor compliance and adjust exemptions based on actual investment and output levels.
US tech giants face intense competition in AI infrastructure development. Google's Gemini AI platform surpassed 750 million monthly active users, while Microsoft integrates AI across its enterprise software stack. Amazon's AWS remains the largest cloud provider by market share at over 30%.
The proposed exemptions highlight the administration's balancing act between trade policy and domestic technology investment. By linking tariff relief to concrete manufacturing commitments, officials aim to accelerate US semiconductor production while supporting AI infrastructure growth.
Industry analysts note the exemptions could provide significant cost savings for companies expanding AI data centers. Advanced chips powering AI models represent substantial portions of data center construction budgets.
The policy discussions come amid record spending by major technology providers on AI infrastructure. Fourth-quarter earnings revealed capital allocation shifts toward generative AI capabilities across cloud platforms.
TSMC's Arizona facilities will produce advanced semiconductors for AI applications. The company's investment timeline matches Big Tech's aggressive data center expansion plans through 2026 and beyond.
Commerce Department officials continue refining exemption criteria and implementation details. Final decisions could still change based on TSMC's actual investment progress and production milestones.
The tariff exemption proposal represents a strategic approach to semiconductor policy. It connects trade measures directly to domestic manufacturing investment while supporting US leadership in artificial intelligence development.
