Trump Administration Considers Massive AI Chip Deal with UAE, Raising Concerns

US Weighs Letting UAE Buy Over a Million Advanced Nvidia Chips

The Trump administration is weighing a deal that would allow the United Arab Emirates to import more than a million advanced Nvidia Corp. chips, people familiar with the matter said, a quantity that far exceeds limits under Biden-era AI chip regulations -- and one that's raised concerns that American hardware risks ending up in China's hands. The deal, which is still being negotiated and could change, would let the UAE import 500,000 of the most advanced chips on the market each year from now to 2027, said the people, who asked not to be named discussing confidential conversations. One-fifth would be set aside for the Abu Dhabi AI firm G42, while the remainder would go to US companies building data centers in the Gulf nation, according to the people.

US weighs letting UAE buy over a million advanced Nvidia chips, Bloomberg News reports

May 13 (Reuters) - The Trump administration is weighing a deal that would allow the UAE to import more than a million advanced Nvidia (NVDA.O), opens new tab chips, a quantity that far exceeds limits under Biden-era AI chip regulations, Bloomberg News reported on Tuesday. The deal, which is still being negotiated and could change, would let the UAE import 500,000 of the most advanced chips on the market each year from now to 2027, the report said, citing people familiar with the matter. While one-fifth would be set aside for the Abu Dhabi AI firm G42, the rest will go to U.S. companies building data centers in the Gulf nation, according to the report. The Department of Commerce and Nvidia did not immediately respond to Reuters' requests for comment. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Trump Administration Considers Large Chip Sale to Emirati A.I. Firm G42

Ana Swanson reported from Washington, and Tripp Mickle from San Francisco. The Trump administration is considering a deal that could send hundreds of thousands of U.S.-designed artificial intelligence chips to G42, an Emirati A.I. firm that the U.S. government has scrutinized in the past for its ties to China, three people familiar with the discussions said. The negotiations, which are ongoing, highlight a major shift in U.S. tech policy ahead of President Trump's visit to the Gulf States this week. The talks have also created tension inside the Trump administration between tech- and business-minded leaders who want to close a deal before Mr. Trump's trip and national security officials who worry that the technology could be misused by the Emiratis. The Trump administration has embraced cutting direct deals for A.I. chips with officials from the Middle East, as it looks to strengthen U.S. ties in the region, said the people, who spoke on the condition of anonymity because the negotiations are ongoing. The approach marks a break from the Biden administration, which had rejected similar A.I. chip sales over fears that they could give autocratic governments with strong ties to China an edge over the United States in developing the most cutting-edge A.I. models in coming years. In the talks with G42 and officials from the United Arab Emirates, David Sacks, the White House A.I. czar, has been working on an agreement that would give the Emirati firm access to chips with limited oversight. Some of the chips would go to a partnership that G42 has with the U.S. firm OpenAI, while others would be sent directly to G42, one of the people said, adding that a deal hasn't yet been finalized. The Trump administration is also expected to announce a deal this week with officials in Saudi Arabia, two people with knowledge of the agreement said. The deal would give the Saudi government and its new A.I. company, Humain, access to tens of thousands of semiconductors and technology support from Nvidia and its A.I. chip rival, Advanced Micro Devices. The United States began requiring a license for the purchase of A.I. chips during the Biden administration because of their value in helping governments develop military and surveillance technologies. The Trump administration's changes have the potential to reshape an arms race between nations, and countries eager to develop A.I. Major chip sales would be a boon for G42, potentially catapulting the Emirati firm to be one of the most powerful A.I. companies outside of the United States. It would be a powerful catalyst for the businesses of Nvidia, the world's leading A.I. chip maker. And it would fulfill OpenAI's multiyear effort to bring more computing power to the Middle East. Alasdair Phillips-Robins, a fellow at the Carnegie Endowment for International Peace and a former official in the Commerce Department, said that a sale that included hundreds of thousands of advanced chips would risk handing "control of the future of A.I. to countries that have political systems that we shouldn't fundamentally trust." "There's a reason why these countries are so keen to get these chips, and it's not purely the financial returns," he said. "A.I. is going to be the backbone of militaries." The White House and G42 didn't respond to requests for comment. OpenAI declined to comment. Mr. Sacks has been in the Middle East for several days working on this and other deals. On Sunday, he posted a photo of himself on social media with Sheikh Tahnoon bin Zayed Al Nahyan, the national security adviser of the U.A.E., who also who chairs G42, saying that they had discussed their nations' A.I. plans and opportunities. "The U.S. must make itself the partner-of-choice for our friends and allies -- otherwise others will fill that gap," Mr. Sacks wrote on X, the social media platform. Sheikh Tahnoon said in a social media post that the discussions were part of strengthening economic ties between the countries. He added that "collaboration in advanced technologies serves as a cornerstone for building a smart, sustainable digital future that meets the aspirations of future generations." G42 is at the forefront of an Emirati effort to build an artificial intelligence industry and to lessen its dependence on oil income. The firm is controlled by Sheikh Tahnoon. It includes a $10 billion technology investment fund, an Arabic language A.I. model, a tech talent platform, a health care company and a genome-sequencing program. The firm has been clamoring for access to U.S. chips for several years, but negotiations with the Biden administration were slowed by concerns over its ties to China. In previous years, American spy agencies issued warnings about G42's work with Chinese companies, including telecom firm Huawei, and warned that G42 could be a conduit for siphoning advanced American technology to China. G42 has denied any connections to the Chinese government or military. In 2023, a congressional committee wrote a letter urging the Commerce Department to look into whether G42 should be put under trade restrictions because it had partnerships with Chinese firms and employees who came from government-connected companies in China. Before agreeing to sell chips to G42 in 2024, the Biden administration spent months negotiating security protections and a partnership with Microsoft. Under that agreement, Microsoft managed the chips to train and develop A.I. models, and G42 had permission to sell Microsoft services that use those chips. But after cutting that deal, G42 pressed U.S. officials for more chips and wanted to be able to operate them directly. Sam Altman, the chief executive of OpenAI, also lobbied the U.S. government to approve more chip sales to the region. Mr. Altman had been working with Emirati officials to expand global computing power because there had been a shortage of it in the United States. He wanted to increase the supply of chips and data centers because he believed it would allow OpenAI to build more powerful A.I. systems. (The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.) MGX, an Emirati investment firm, is an investor in OpenAI. Last year, it joined a group of investors that contributed $6.6 billion to the start-up. A former Biden official said that G42 had requested roughly 200,000 A.I. chips for their partnership with Microsoft, as well as at least 500,000 chips by 2026 that would be solely owned and operated by G42. Senior Biden administration officials, even those who were open to cooperation with the Gulf States, saw those levels of sales as a nonstarter, the person said. As Mr. Trump travels around the Middle East this week, he is expected to tout deals made with both governments and companies. The administration is also expected to showcase deals and negotiations across the region by American tech companies, including AMD, Nvidia, Microsoft, Google and OpenAI, according to six people familiar with the plans. The Trump administration has also announced that it plans to repeal a Biden administration rule that capped the number of A.I. chips that could be sent to certain countries, in favor of direct deal-making with governments. The Middle East is most likely to be the first beneficiary of this change. Officials from the U.A.E. and Saudi Arabia have been negotiating with the Trump administration over the past two months to strike agreements that would provide them steady access to A.I. chips, deals which may be announced this week.

U.S. hopes to strike deals on minerals, chips during Trump's Mideast trip

The export of vast quantities of AI chips is under negotiation, along with the approval of a new Saudi mining company that would send critical minerals to the U.S. The Trump administration aims to authorize the sale of hundreds of thousands of artificial intelligence chips to two government-connected firms in the Middle East, in an attempt to create a bulwark against China that helps the region become an AI powerhouse in its own right. The agreements, which could be finalized during President Donald Trump's trip to the region, would enable G42, the national AI champion of the United Arab Emirates, and the newly announced Saudi AI company Humain, to access U.S.-made AI chips, said two people familiar with the negotiations, both of whom spoke on the condition of anonymity because they were not authorized to speak publicly. Skip to end of carousel Trump presidency Follow live updates on the Trump administration. We're tracking Trump's progress on campaign promises and legal challenges to his executive orders and actions. End of carousel Some of the chips would flow through a new partnership between the UAE company and OpenAI, said a third person, who also spoke on the condition of anonymity. Others could go directly to G42. The deals were first reported by the New York Times. The White House did not respond to requests for comment. The Trump administration has also approved a memorandum of understanding worth $9 billion between a U.S. company and Saudi partners to mine and process critical minerals used in advanced manufacturing, energy and defense, said Shahal Khan, founder and CEO of Burkhan World Investments, the U.S. firm that is one of the parties in the deal. According to documents obtained by The Washington Post, under the terms of the agreement, a Saudi company, Grand Mines Mining LLC, will prospect for lithium, cobalt and rare earth elements in Saudi Arabia and elsewhere, such as Africa, which can be exported to the United States. Permitting the export of high volumes of powerful semiconductor chips -- critical components of AI data centers as well as advanced manufacturing and AI-enabled weaponry -- represents a break from U.S. foreign policy. The Biden administration limited the sales of such chips to both countries, out of concern over their strong connections to China and authoritarian governments. The U.S. previously allowed such chips to be exported at a slower place and had put in place a plan to audit data centers in stages and other restrictions. The sheer petroleum-generated wealth of the region and ample access to electrical power there has in recent years spawned mutual interest for collaboration between governments and Silicon Valley AI companies. The U.S. government has approved some of these deals, sometimes with provisions. One signed last year between Microsoft and G42, with the cooperation of the U.S. and UAE governments, mandated that G42 remove all its equipment made by China's biggest competitor in the sector, Huawei, among other restrictions. The Trump administration, according to one of the people familiar with the matter, believes that moving chip sales along more quickly will benefit U.S. interests, both by tying the region closer to the U.S. and by helping to advance American business. The new pace of chip sales will turbocharge the AI capabilities of these countries, giving them a huge leg up in the global AI arms race. That could one day enable them to compete with the U.S., said Sam Winter-Levy, a fellow at the Carnegie Endowment for International Peace who writes about technology and geopolitics. "We essentially spent the last half-century trying to reduce the leverage of these states over the U.S. because of their control of the oil supply. Why would we recreate that dependency?" he said. "You are offshoring a core strategic technology -- computing power -- while creating new sources of dependence on authoritarian regimes with close ties to the Chinese and the Russians." Key tech leaders are in the region this week, including Trump's AI czar, David Sacks, Cerebras Systems CEO Andrew Feldman, OpenAI CEO Sam Altman and billionaire Trump donor and adviser Elon Musk, according to two people familiar with the matter. Since taking office, the administration has brokered major investments in U.S. data center infrastructure from Saudi and UAE companies. The high cost of building and maintaining data centers has led many Silicon Valley companies to seek financing in the Middle East in recent years, and building up capacity in the region is often a condition of that investment. Winter-Levy said he supports exporting AI technologies but said the Trump administration was not being strategic in doing so. "This is an administration that prides itself on using U.S. leverage to the max and driving a hard bargain, but this deal seems to be shaping up to be a giveaway of a core strategic technology in exchange for pretty short-term and superficial concession," he said. Ellen Nakashima contributed to this report.

US weighs letting UAE buy over a million advanced Nvidia chips

The Trump administration is negotiating a deal allowing the UAE to import over a million advanced Nvidia chips, bypassing Biden-era export limits. While aimed at boosting US tech ties and AI capacity in the Gulf, critics warn of national security risks and potential Chinese access through UAE-linked firms like G42.The Trump administration is weighing a deal that would allow the United Arab Emirates to import more than a million advanced Nvidia chips, people familiar with the matter said, a quantity that far exceeds limits under Biden-era AI chip regulations -- and one that's raised concerns that American hardware risks ending up in China's hands. The deal, which is still being negotiated and could change, would let the UAE import 500,000 of the most advanced chips on the market each year from now to 2027, said the people, who asked not to be named discussing confidential conversations. One-fifth would be set aside for the Abu Dhabi AI firm G42, while the remainder would go to US companies building data centers in the Gulf nation, according to the people. One of those companies could be OpenAI, which may announce new data center capacity in the UAE as soon as this week, people familiar with the matter said. Over the lifetime of the deal, G42 could purchase computing capabilities equivalent to between 1 million and 1.5 million H100 chips, Nvidia's current best offering, the people said. That total is around four times more than G42 would have been allowed to buy under a Biden-era chip export control framework, known as AI diffusion that Trump plans to scrap, according to the people. It's on par with the number of chips needed to power a planned Meta Platforms Inc. data center in Louisiana that's so large it would cover a significant portion of Manhattan. All told, if the deal moves forward in its current form, it would mark a sea change in US policy toward AI development in the Middle East and specifically the United Arab Emirates, where US officials have long been wary of government officials' and private companies' ties to Beijing. It's unclear what national security conditions Trump officials have applied to the chip sales, the people said. Under President Joe Biden's administration, G42 agreed to divest from China's Huawei Technologies Co. to pave the way for a $1.5 billion Microsoft Corp. partnership that includes data centers in the Gulf nation. The White House didn't immmediately respond to a request for comment. Nvidia, G42, the UAE embassy in the US and OpenAI declined to comment. The New York Times previously reported some details of the discussions. President Donald Trump on Tuesday began a tour of the Middle East with a stop in Saudi Arabia, after which he will travel to Qatar and then the United Arab Emirates. The US is also considering an agreement to grant Saudi Arabia more access to advanced semiconductors a move that would boost the kingdom's AI ambitions. Trump could unveil the UAE chip accord during his visit there, the people said, while emphasizing that the details are still under active deliberation. Central to the conversations with the UAE is White House AI Adviser David Sacks, who spent several days there ahead of Trump's trip. As part of that visit, Sacks met with Sheikh Tahnoon bin Zayed Al Nahyan -- the UAE's national security adviser and brother of the country's president, who traveled to Washington earlier this year in part to press Trump officials for easier access to Nvidia chips. During Sheikh Tahnoon's March trip, the UAE pledged to spend $1.4 trillion on US tech, energy and infrastructure -- something that aided its pitch to buy more American semiconductors, Bloomberg has reported. "US companies still have the best technology but we are no longer the only game in town; it is well understood that China is catching up fast," Sacks wrote in a post on X about his meeting with Sheikh Tahnoon. "The country that builds its partner ecosystem the fastest is the one that will win this high-stakes competition. Effective AI diplomacy is vital now more than ever." Sacks' argument -- that the US semiconductor lead over China is narrowing -- is one that several company executives have made as they urged the Trump administration to rescind some Biden-era chip export controls. Prospects of a deal to expand the UAE's access to the most advanced AI semiconductors stirred objections among China hawks in Washington, who expressed concern that such an agreement would risk creating a path for Chinese entities to obtain sensitive technology. "Deals like this require scrutiny and verifiable guardrails," Representative John Moolenaar, the top Republican on the House China committee, said in a post on X. "We raised concerns about G42 last year for this very reason -- and we need safeguards in place before more agreements move forward."

US weighs letting UAE buy over a million advanced Nvidia chips, Bloomberg News reports

(Reuters) - The Trump administration is weighing a deal that would allow the UAE to import more than a million advanced Nvidia chips, a quantity that far exceeds limits under Biden-era AI chip regulations, Bloomberg News reported on Tuesday. The deal, which is still being negotiated and could change, would let the UAE import 500,000 of the most advanced chips on the market each year from now to 2027, the report said, citing people familiar with the matter. While one-fifth would be set aside for the Abu Dhabi AI firm G42, the rest will go to U.S. companies building data centers in the Gulf nation, according to the report. ChatGPT-maker OpenAI, which may announce new data-center capacity in the UAE as soon as this week, could be one of those companies, the report said. The report comes on the heels of U.S. President Donald Trump securing a $600 billion commitment from Saudi Arabia to invest in the United States. The Department of Commerce and OpenAI did not immediately respond to Reuters' requests for comment, while Nvidia declined to comment. Abu Dhabi's artificial intelligence push has mostly been led by state-backed G42, which has drawn increased scrutiny from China hawks in Washington amid fears that the UAE is becoming a conduit for China to receive advanced American AI technology it is blocked from getting directly from the U.S. According to the Bloomberg report, G42 could purchase computing capabilities equivalent to between 1 million and 1.5 million H100 chips over the lifetime of the deal. That is around four times more than it would have been allowed to buy under a Biden-era chip export control framework, known as AI diffusion, it said. Trump's administration plans to rescind and modify this rule, which curbed the export of sophisticated AI chips, a spokeswoman for the Department of Commerce had said last week. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)