US chip export rules put India’s GPU plans under pressure

US restrictions on advanced AI chip exports are raising concerns among Indian cloud companies and data centre providers as the AI Diffusion Framework approaches implementation on May 15. The Biden-era policy is aimed at protecting US AI leadership and national security by limiting global access to advanced chips controlled by companies including Nvidia, AMD and Intel.

India is classified among Tier-2 countries, where volume caps apply and some transactions tied to advanced AI model development require validated end user authorisation. Industry executives said the proposed total processing performance cap could sharply limit imports of high-end hardware, with estimates suggesting India could buy only up to 33,000 GPUs if it opts for Nvidia B200, 27,000 GPUs for B300, 25,000 GPUs for GB200, and 50,000 GPUs for H200.

Cloud and data centre leaders said the restrictions could make compliance cumbersome, limit local AI development and force Indian developers to rely on overseas cloud providers at higher cost. Executives urged the Indian government to seek a special exemption, move India into Tier-1, or secure a quota adjustment that reflects the country’s scale, digital adoption and ties with the US.