The United States has reached a preliminary agreement with the United Arab Emirates that would significantly increase the UAE’s access to advanced artificial intelligence chips, marking a notable shift in U.S. export control policy.
This comes after the Trump administration rescinded U.S. Former President Biden’s AI Diffusion rule that created a three-tiered country access to U.S. manufactured AI chips, a rule that was supposed to go into effect on May 15. In its stead, the Trump-aligned Commerce Department has now negotiated for a robust framework to allow U.S.-manufactured AI Chip export to the United Arab Emirates (UAE) and other countries. However, this framework still excludes China and South Korea from being beneficiaries.
The deal, which may be finalized during President Trump’s visit to Abu Dhabi, would allow UAE to import 500,000 of Nvidia’s most sophisticated AI chips annually, starting in 2025. This new development highlights two things: a policy change to a more flexible approach to AI technology as opposed to the former restrictive approach, and the UAE’s growing ambitions as a global AI hub.
According to Reuters, sources familiar with the negotiations said under anonymity that the agreement is expected to extend to at least until 2027, with the possibility of lasting until 2030.
Under the proposed deal, 20% of the chips, which is approximately 100,000 units annually, would be allocated to G42, a prominent UAE tech company with connections to Abu Dhabi’s sovereign wealth fund Mubadala and the ruling family. The Artificial Intelligence company’s chairman, Sheikh Tahnoon bin Zayed Al Nahyan, also serves as the UAE’s national security adviser and brother of the emirate’s president, signifying that the company would benefit the most from this deal.
The remaining 80% would then be distributed among major U.S. firms engaged in AI development, such as Microsoft, Oracle and Nvidia, as they may establish data centers in the UAE. Nvidia CEO Jensen Huang confirms two new “ambitious AI infrastructure build outs,” in an interview with Stratechery, with one in Abu Dhabi and the other in Saudi Arabia.
For the UAE, securing expanded access to advanced AI chips represents a milestone in its efforts to position the Middle Eastern country as a global AI powerhouse. The majority of AI computing resources are all concentrated in the U.S. and China, as well as the achievements and strides we’ve seen in the AI industry coming from these two powerful countries. However, if these negotiations with the UAE materialize, we could see an emergence of a third significant center in the global AI landscape.
