The US government has had a bit of a tumultuous relationship with, well, most of the world around the export of chips, thanks to the exponential growth of AI and the uncertainty of tariffs. Large datacentres need technology to keep growing, and America clearly wants to sit at the top of the AI pile. The United Arab Emirates may just sit on that pile alongside it, according to recent agreements.
As reported by Bloomberg, the US and the United Arab Emirates have reached an accord for the UAE to start taking in Nvidia processors for AI development. The Commerce Department Bureau of Industry and Security reportedly issued a license to Nvidia to export chips, but the specific number of processors has not yet been announced.
The US was previously in talks to approve up to 100,000 chips a year to the UAE, but that number jumped up to 500,000 a year until 2027, after talks. The current figure of exported chips under the new license has not been disclosed.
The original agreement earlier this year suggested that, of the 500,000 export figure, a fifth would be going to G42, a large AI company based in Abu Dhabi, with much of the rest going to American operations (like datacenters) in the region. Bloomberg reports that this initial round of permits does not specify any chips going to G42. The UAE will match investments made in chip exports with its own investment in the US, and G42 is expected to get a fifth going forward.
A spokesperson on behalf of the deal reportedly said, “The Commerce Department is fully committed to the transformational US-UAE AI partnership deal.”
In March this year, the UAE first pledged to invest $1.4 trillion (with a t) into the US, so the relationship between the two entities has been growing steadily. This was shortly followed by a joint plan between the US and the UAE to create a new 5GW AI campus in Abu Dhabi.
In May this year, a group of Senate Democrats addressed Commerce Secretary Howard Lutnick with a letter, stating, "Taken together, these announcements amount to a breathtaking rollback of export control restrictions that have helped maintain the US technological edge to ensure the United States wins the AI race and prevent our adversaries from accessing our most sensitive technologies."
There's no efficient way to vet that the chips are going to agreed-upon causes, and the jump from 100,000 chips a year to 500,000 would significantly speed up AI development in the UAE.
Lutnick stated in June: "We are going to allow our allies to buy AI chips, provided they’re run by an approved American data centre operator, and the cloud that touches that data centre is an approved American operator." Further permits are expected to arrive in the future.
Both TSMC and Samsung reportedly eyed the UAE for potential investment last year, with them considering building new factories. Despite not being water-abundant (which is needed for large factories), the UAE does have a lot of cash and an interest in AI.
Given the large funding of the UAE, the Trump administration is seemingly looking for an ally in the AI race. Similarly, the US Government recently went back on export restrictions to China, allowing Nvidia to sell the H20 AI chip, which was then turned down due to demands made by the Chinese government. Both China and the US are increasing efforts into domestic chips, whereas the UAE seems content with taking in hundreds of thousands of units from America for now.
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