Trump's AI Chip Deals with Gulf States Spark National Security Concerns

Trump's Mideast Chips Deals Imperil US National Security, Democrats Warn

Key Senate Democrats urged the Trump administration to revisit new artificial intelligence deals with Saudi Arabia and the United Arab Emirates, saying that expanded sales of AI chips to the Middle Eastern countries risk exposing advanced technology to China and Russia, while potentially limiting supplies available for American companies. Agreements unveiled by companies including Nvidia Corp. and Advanced Micro Devices Inc. during President Donald Trump's trip to the region last week opened the door for the Gulf nations to buy tens of thousands of advanced semiconductors -- just as the administration was moving to rescind Biden-era rules capping those countries' access to chips. The combined moves, warned a group of Senate Democrats led by Elizabeth Warren and Minority Leader Chuck Schumer, endanger US national security and economic competitiveness.

Trump's Middle East dealmaking could reshape the global AI race

Donald Trump's dealmaking tour of the Middle East last week saw the sales of Boeing aircraft, the signing of defence contracts and the announcement of oil investments. But the most significant decision may be to allow hundreds of thousands of AI chips to flow to the region. The US will now allow Nvidia to sell 500,000 AI chips per year to the UAE, according to media reports, while at least 18,000 will be transferred to Saudi Arabia. By comparison, Elon Musk's world-leading Colossus data centre in Tennessee currently has 200,000 high-end chips on site. If the UAE imports half a million high-end chips annually, by the end of the decade its capacity might outstrip the US-based Stargate project, the joint venture between OpenAI and SoftBank, according to Rand Corporation AI expert Lennart Heim. The decision to let Middle Eastern countries acquire top-notch computing clusters is a major reversal. The US government previously saw Saudi Arabia and especially the UAE as AI rivals and friends of China. Yet before leaving for the Middle East, Trump repealed the rule that had limited chip transfers to the region in favour of a new policy of bilateral dealmaking. In Washington there were three risks cited to justify limiting chip sales to the Middle East: that the region's autocrats would use AI to violate human rights; that computing capacity would be diverted to China; and that generously subsidised data centres in the Middle East would crowd out investment in America's own AI infrastructure. Trump declared in Riyadh that "we are not here to lecture". Either way, the link between AI infrastructure and human rights was never very clear. The region's autocrats have plenty of experience locking up dissidents and repressing minorities even in the absence of high-tech tools. More complex are ties to China. Both Saudi Arabia and the UAE have previously said they will cut ties with China to obtain better access to American tech. Yet both countries have every incentive to play Beijing and Washington off one another. It was less than a year ago that the UAE air force conducted joint military exercises with the PLA in Xinjiang, the epicentre of the Chinese government's efforts to harness technology for repression. Saudi officials reportedly requested in negotiations this month to deploy Huawei equipment in data centres with US AI chips. Much therefore hinges on the efficacy of US monitoring mechanisms. Eighty per cent of the chips deployed in the UAE will be in data centres operated by American companies, according to media reports. The US has a shaky record of export control enforcement, illustrated by reports this year that a Huawei shell company illicitly procured millions of chips from Taiwanese chipmaker TSMC. Despite these risks, Trump has highlighted the ways his dealmaking is good for business. It certainly benefits semiconductor companies like Nvidia, which will sell more chips, and US cloud computing companies, which will get capital, land and power to build AI clusters across the region. In exchange, Middle Eastern money is supposed to flow into America's AI sector. Some already has. Emirati investment vehicle MGX has been a big investor in OpenAI, for example. Yet Trump and Middle Eastern leaders now promise vastly more. The White House says the UAE, Qatar and Saudi Arabia will invest $1.4tn, $1.2tn and $600bn respectively across sectors including technology. These are huge numbers with sparse details. Even a fraction of these sums could be transformative. But the impact of Trump's dealmaking will depend on whether his Gulf partners actually invest billions in America's AI infrastructure, or whether they focus their spending on building their own data centres and tech companies instead.

Opinion | The folly of Trump's gulf states AI chip deals

The pacts will reshape the future of AI infrastructure -- and who will control it. Jim Secreto is a former senior official in the Biden Commerce and Treasury departments. President Donald Trump's tech deals with the Persian Gulf states are recasting where the future of artificial intelligence will be built -- and who will control it. And that future might not favor the United States. During his trip to the Middle East last week, Trump's administration announced plans for the United Arab Emirates to import hundreds of thousands of Nvidia's most advanced semiconductors. Saudi Arabia, meanwhile, is planning to deploy more than 18,000 AI chips in a new 500-megawatt data center. These state-backed projects promise world-class computing infrastructure, fueled by cheap energy, sovereign capital and direct access to U.S. technology. But every data center that breaks ground in Abu Dhabi or Riyadh represents a missed opportunity to build that capacity in places such as Texas, Virginia or Ohio, where U.S. firms, workers, and communities are ready to compete if given the chance. That's the real consequence of Trump's transactional diplomacy and decision to shift from the Biden-era AI diffusion rule, which restricted the export of advanced AI chips and models. The rule was intended to protect national security, and sorted countries into tiers based on trust. But beneath its technical language was a broader strategic side effect: shaping the geography of global AI infrastructure. It treated compute, the raw processing power needed to train AI models, as a strategic asset -- and one that the U.S. should concentrate within its borders or those of trusted partners. In practice, it was a quiet industrial policy -- a way of steering an estimated $2 trillion in projected AI data center investment toward U.S. soil. With the Commerce Department's repeal of the rule last week, that approach is now gone. The logic, however, still holds. Compute is foundational. Whoever controls it shapes the future of innovation and power. But the market, left to itself, is rapidly moving offshore. The push factors are well known. U.S. permitting is slow. Grid capacity is constrained. Energy demand for AI is insatiable. Goldman Sachs projects global data center energy demand will rise 165 percent by 2030, from 55 to 122 gigawatts. Hyperscalers such as Google, Microsoft and Oracle face challenges in building capacity domestically at the scale and speed needed to train the most advanced AI models. At the same time, the pull factors abroad are increasingly hard to resist. The gulf states are offering not just capital but also national-level mobilization. U.S. hyperscalers don't just get a loan; they get land, power, subsidies -- and fast-track access to the compute capacity needed to train leading-edge AI models. And government-funded firms such as the Emirates' G42 and Saudi Arabia's Humain are moving fast and spending big to secure long-term roles in the global AI supply chain. Emirati and Saudi officials aren't making these investments solely for investor returns. They're driven by their own industrial policies, seeking to diversify their economies away from oil and gas, and to leverage a foundational technology that will shape military, intelligence and economic capabilities for decades to come. And they're pairing access with promises: The White House announced that the UAE has pledged up to $2 trillion in U.S. investments across energy, semiconductors and manufacturing; Saudi Arabia has committed $600 billion in deals, including a $20 billion U.S. data center initiative via DataVolt. Critics of Biden's AI policy had a fair point: Export restrictions alone won't stop China. To lead, the U.S. must outcompete. The tech sector is a crown jewel, and overregulation risks harming innovation. Industry leaders warned that limiting access to U.S. chips would push countries away from America's tech ecosystem and toward China's digital Belt and Road Initiative. And if denied access to U.S. technologies, the gulf states -- allies the U.S. needs in the Middle East -- can turn to Chinese tech leaders such as Huawei, Tencent and ByteDance. Those are serious concerns. But removing any guardrails without an alternative in place creates a different kind of vulnerability: an open invitation to ship overseas the AI infrastructure the U.S. should be anchoring at home. And, when that happens, what's lost isn't just national control, it's economic opportunity. AI data center buildouts do more than return capital. They can create jobs, drive demand for clean power and seed tech ecosystems beyond traditional coastal hubs. Letting that momentum shift to Abu Dhabi or Riyadh may help close a deal, but it sidelines an opportunity to strengthen America's long-term economic security. There's still time to adjust. The Biden administration had already laid the groundwork for a more balanced approach with a late-term executive order aimed at streamlining permitting and accelerating U.S. AI infrastructure. The Trump administration should build on that foundation. That means protecting U.S. tech leadership while accelerating domestic data center development -- not just deregulation and overseas dealmaking. Export controls aren't enough. But neither is outsourcing to the highest bidder the most critical infrastructure of the 21st century.

Schumer slams Trump-led deals to sell AI chips to Saudi Arabia, UAE

Senate Democratic Leader Chuck Schumer (N.Y.), a leading advocate for American leadership in the field of artificial intelligence, is slamming President Trump's support for deals to sell advanced U.S. chip technology to Saudi Arabia and the United Arab Emirates. Schumer says that Trump would "green-light the sale of the most sensitive U.S. chip technology in exchange for vague promises of more foreign investment." "This deal could very well be dangerous because we have no clarity on how the Saudis and Emiratis will prevent the Chinese Communist Party, the Chines government, the Chinese manufacturing establishment from getting their hands on these chips," Schumer warned in a speech on the Senate floor Thursday. "Inevitably, when foreign countries end up with American-made chips, the CCP, the Chinese Communist Party, sooner or later gets ahold of these American chips and their secrets in them," he said. "That's why we've had such strong restrictions against exporting these chips to other counties." He noted that Rep. John Moolenaar (Mich.), the Republican chairman of the House Select Committee on the Chinese Communist Party, warned on social media the new U.S. chip deals with Gulf nations "present a vulnerability for the CCP to exploit." Several U.S. tech firms announced new deals with Saudi Arabia and the UAE during Trump's trip to the Middle East. Nvidia plans to sell thousands of advanced chips to Saudi Arabia, with a shipment of 18,000 "Blackwell" chips going to an AI company backed by Saudi Arabia's sovereign wealth fund, according to Reuters. Advanced Micro Devices and Qualcomm have also announced deals with the Saudi-backed company, Humain. Schumer warned Trump's diplomatic outreach to Gulf nations on sensitive technology will result in more hi-tech manufacturing in those states instead of the United States. "What's this about bringing jobs and high-end technology back to the country?" Schumer asked. "All of a sudden it's okay to give it to other countries? Especially other countries whose security might be not as tight as ours and allow the Chinese government to get ahold of these chips?"

Chuck Schumer Blasts Trump For Backing AI Chip Sales To Saudi Arabia, UAE: 'This Deal Could Very Well Be Dangerous' - Alibaba Gr Hldgs (NYSE:BABA), Advanced Micro Devices (NASDAQ:AMD)

On Thursday, Senate Minority Leader Chuck Schumer (D-N.Y.) warned that President Donald Trump's support for exporting sensitive U.S. artificial intelligence chip technology to Persian Gulf allies could benefit China. What Happened: On the Senate floor, Schumer criticized Trump for greenlighting high-stakes deals allowing advanced U.S. chips to be sold to Saudi Arabia and the UAE, reported The Hill. "This deal could very well be dangerous because we have no clarity on how the Saudis and Emiratis will prevent the Chinese Communist Party, the Chinese government, the Chinese manufacturing establishment from getting their hands on these chips," Schumer said. He warned that "inevitably, when foreign countries end up with American-made chips, the CCP, the Chinese Communist Party, sooner or later gets hold of these American chips and their secrets in them." See Also: Elon Musk Says Will Come As A 'Surprise To Most' As China's Economy Surpasses US And EU Amid Rising Tariffs And Growing Recession Fears Several U.S. tech firms -- including Nvidia Corporation NVDA, Advanced Micro Devices Inc. AMD and Qualcomm Inc. QCOM -- have announced major AI chip agreements with Gulf-backed entities during Trump's Middle East trip. Nvidia alone plans to deliver 18,000 Blackwell chips to a Saudi sovereign wealth fund-backed company. Why It's Important: Over the years, the U.S. government has imposed tight export restrictions on advanced chips over fears they could be used for military or surveillance purposes by adversaries like China. Schumer said these new deals undermine those efforts and could shift cutting-edge manufacturing abroad. Get StartedEarn 7.2% -- No Matter What the Fed Does Markets expect rate cuts -- but your earnings don't have to suffer. Lock in 7.2% until 2028 from ten individual bonds. Get Started "What's this about bringing jobs and high-end technology back to the country?" Schumer asked. "All of a sudden it's OK to give it to other countries? Especially other countries whose security might not be as tight as ours?" Previously, Nvidia CEO Jensen Huang cautioned that restricting access to China's AI market could negatively impact not only the company but also American jobs and technological innovation. His statement came after a report indicated that Nvidia has informed major Chinese clients -- including Alibaba Group BABA, ByteDance and Tencent Holdings TCEHY -- that it is working on a new variant of H20 AI chip models tailored to comply with U.S. export regulations. Nvidia holds a growth score of 95.06% according to Benzinga Edge Stock Rankings. Click here to see how it compares to other leading tech companies such as AMD, Qualcomm, Alibaba and Tencent. Photo Courtesy: Ron Adar on Shutterstock.com Read Next: JPMorgan CEO Jamie Dimon Warns Recession Is Best-Case Outcome Of Trump Trade War Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMDAdvanced Micro Devices Inc$115.15-2.18%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum23.64Growth82.88Quality71.33Value15.31Price TrendShortMediumLongOverviewBABAAlibaba Group Holding Ltd$124.00-7.50%NVDANVIDIA Corp$134.70-0.47%QCOMQualcomm Inc$152.79-0.12%TCEHYTencent Holdings Ltd$66.16-2.53%Market News and Data brought to you by Benzinga APIs

Democrats warn Trump's Middle East chip deals imperil U.S. security

Key U.S. Senate Democrats have urged the administration of President Donald Trump to revisit new artificial intelligence deals with Saudi Arabia and the United Arab Emirates, saying that expanded sales of AI chips to the Middle Eastern countries risk exposing advanced technology to China and Russia, while potentially limiting supplies available for American companies. Agreements unveiled by companies including Nvidia and AMD during Trump's trip to the region last week opened the door for the Gulf nations to buy tens of thousands of advanced semiconductors, and they could be approved to sell over a million more -- just as the administration plans to rescind and rewrite Biden-era rules capping those countries' access to chips. The combined moves, warned a group of Senate Democrats led by Elizabeth Warren and minority leader Chuck Schumer, endanger U.S. national security and economic competitiveness. "Taken together, these announcements amount to a breathtaking rollback of export control restrictions that have helped maintain the U.S. technological edge to ensure the United States wins the AI race and prevent our adversaries from accessing our most sensitive technologies," the senators wrote in a letter Monday to Commerce Secretary Howard Lutnick and Secretary of State Marco Rubio.

US Democrats warn Trump admin against AI chip deals with Gulf states

The appeal comes after President Donald Trump's recent visit to the Gulf, during which he announced plans for American companies to supply tens of thousands of high-end AI chips to the region. A group of leading Senate Democrats is urging the Trump administration to reassess recent artificial intelligence agreements with Saudi Arabia and the United Arab Emirates, arguing the deals could jeopardize national security and restrict access to critical technology for US companies. For more stories from The Media Line go to themedialine.org The appeal comes after President Donald Trump's recent visit to the Gulf, during which he announced plans for American companies, including Nvidia and Advanced Micro Devices, to supply tens of thousands of high-end AI chips to the region. The lawmakers, led by Sens. Elizabeth Warren and Chuck Schumer, warned in a letter Monday that the agreements "amount to a breathtaking rollback of export control restrictions" and risk transferring sensitive technology to China and Russia. "At a time when many US companies need to wait years to acquire cutting-edge AI hardware, we find it deeply troubling that the Trump administration is prioritizing making our latest technology available to Saudi Arabia and the UAE," they wrote. Trump admin looking to repeal Biden-era export rules The US has limited the sale of advanced chips to Saudi Arabia and the UAE since 2023 to prevent indirect access by China. But the Trump administration is moving to repeal Biden-era export rules and replace them with country-by-country negotiations. The Commerce and State Departments have defended the new approach, saying safeguards would be in place and that foreign data centers would require US-approved operators. Nvidia responded to the criticism by claiming the deals will boost the American economy, generate tax revenue, and build AI infrastructure at home. "Data centers in the Middle East will be built securely on American technology," the company said in response to the lawmakers' letter.