In a Major AI Deal, the United States Approves Export of Nvidia Chips

SadaNews - The United States has approved the export of advanced artificial intelligence chips from Nvidia to the UAE, valued at several billion dollars, marking the first step in implementing a controversial bilateral agreement that could shape a new model for American diplomacy in the field of artificial intelligence.

According to informed sources, the U.S. Department of Commerce issued export licenses for Nvidia through the Bureau of Industry and Security under the agreement signed last May between Washington and Abu Dhabi, which is pivotal to an escalating strategic partnership between the two countries.

Emirati Investments Paving the Way

A U.S. official confirmed that the approval came after the UAE presented concrete plans to invest an equivalent amount in the United States. However, the official did not disclose the exact value of the chip shipments or the scale of Emirati investment.

A spokesperson for the U.S. Department of Commerce stated that the administration is "fully committed to the transformative AI partnership between the United States and the UAE," while Nvidia and G42 refrained from commenting, and no response has been issued from the Emirati side.

These licenses represent the first official batch of permits for selling Nvidia chips to the UAE since President Donald Trump took office, reflecting tangible progress in implementing the agreement, which revolves around a giant data center project with a capacity of 5 gigawatts in Abu Dhabi, with OpenAI being one of its key partners.

The agreement has sparked controversy in political circles in Washington, amid fears regarding the size of the massive investment outside the United States, particularly in a country with growing economic ties to China.

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A Bold $1.4 Trillion Plan

Details of the agreement indicate that the UAE has pledged to inject $1.4 trillion in investments into the United States over the next decade, without specifying the targeted projects yet. In exchange, Washington plans to approve the export of up to 500,000 AI chips annually from American companies, with around 20% allocated to G42, the prominent Emirati player in the AI sector.

According to sources, the initial permits do not include any shipments directed to G42, which is currently collaborating with OpenAI on a joint project within the Emirati capital.

It is noteworthy that the UAE continues to vigorously push for leadership in the field of artificial intelligence, through massive investments in local and global infrastructure.

The timing of additional licenses for exporting Nvidia AI chips to the UAE remains unclear, according to informed sources, which emphasized that it is connected to the progress of the parallel Emirati investment plans. Under the bilateral agreement, the oil-rich UAE will inject investments equivalent to the value of the chips it receives, based on a "dollar for dollar" basis.

The Gulf Becomes a Tech Financing Hub

The Gulf, particularly the UAE and Saudi Arabia, has a growing appetite for artificial intelligence, backed by immense financial resources, making the region one of the most important global markets for tech giants like Nvidia and OpenAI.

However, since 2023, Gulf countries have been subject to U.S. restrictions on importing advanced AI chips, amid fears of technology leaks to China, which itself faces stricter controls over semiconductors.

Under President Joe Biden, approvals for export licenses have slowed, as his administration worked on formulating a global framework limiting the sales of advanced chips. This framework allowed for national exceptions in exchange for security commitments from the importing countries. Despite some limited licenses granted at the end of his term, the current agreement represents a fundamental shift.

In contrast, President Donald Trump's team is seeking to expand the scope of the agreement. The data center deal in Abu Dhabi is among the most notable announcements from Trump's Middle East trip last May. According to officials, this strategy aims to attract massive American investments and prevent Chinese companies, led by Huawei, from expanding in global AI markets.

Between Fears of China and G42's Presence

The Emirati company G42 established a partnership with Microsoft during the Biden administration, after pledging to sever ties with the Chinese company Huawei. However, G42 has not yet received any of the new licenses.

Comments from David Sachs, the White House AI official, suggest that most AI chips in the UAE will be "owned and operated by American cloud computing companies," implying tight controls over the use of the chips.

Conditions for American Operators

U.S. Commerce Secretary Howard Lutnick stated before lawmakers after Trump's trip, "We will allow our allies to purchase AI chips, provided they are operated by a certified American data operator, and that the associated cloud is also American."

Although China has sought to penetrate the Emirati market through offers from Huawei that included shipments of Ascend 910B chips, these attempts have not gained traction, according to Bloomberg reports.