US eases export restrictions on AI chips to UAE after military partnership in Iran conflict

US Grants UAE Privileged Access to Advanced Computing Items

The US Department of Commerce announced Friday that it is loosening export restrictions on the United Arab Emirates, granting the Gulf nation license-free access to advanced computing items including AI chips, servers, and data center equipment 1

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. Under the new rule, filed for publication in the Federal Register, eight US-headquartered companies—Apple, Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI—along with their UAE-based subsidiaries can now receive covered technology without applying for individual export licenses 1

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. UAE companies G42 and Core42 also benefit from this eased access to AI chips, which industry analysts estimate could be worth billions of dollars 5

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The Commerce Department moved the UAE into a country grouping under the Export Administration Regulations that allows more license exceptions for military and dual-use items, placing it alongside NATO countries and other allies 2

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. Notably, the UAE becomes the only country in this group that is not a member of multilateral export control regimes, with other regional powers like Israel and Saudi Arabia remaining outside this privileged category 2

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Military Partnership Drives Strengthened US UAE Relations

The Commerce Department explicitly cited the UAE's military support during Operation Epic Fury—the US-Israeli strikes on Iran that began in February—as justification for the upgraded status 2

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. The UAE conducted dozens of airstrikes, intercepted hundreds of missiles, and helped maintain oil flow through the Strait of Hormuz during the conflict 4

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. President Trump praised UAE President Sheikh Mohamed bin Zayed Al Nahyan at a recent Group of Seven summit in France, calling him "a warrior" and noting that the UAE has been "with the United States for a long time, but I would say much more so since I came on board" 4

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The Commerce Department noted that the US has worked with the UAE for decades to counter Iran and its proxies, including Hamas, Hezbollah, and the Houthis 5

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. The UAE is the largest US trading partner in the Middle East, with foreign direct investment in the United States valued at over $1 trillion 2

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. In exchange for the eased export restrictions, the UAE has committed to make matching investments in US AI digital infrastructure buildout 3

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Impact on Tech Companies and Data Center Infrastructure

For Apple and other tech giants, the rule change eliminates months-long licensing processes that previously hindered operations in the UAE 1

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. The most obvious application for Apple would be data center infrastructure, though the company has not yet announced specific plans 1

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. Microsoft and OpenAI, which have already announced plans for data centers in the UAE, will benefit from removed export hurdles 4

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The UAE's flagship AI company G42, controlled by national security adviser Sheikh Tahnoon bin Zayed Al Nahyan, can now purchase Nvidia chips without restriction for at least the next nine months 4

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. UAE officials have indicated that G42 plans to become a US company, primarily owned by US investors, according to people familiar with the discussions 3

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. Sheikh Tahnoon and other UAE officials have lobbied for chip access for years, approaching the White House directly after Operation Epic Fury began and pointing to India as an example of a country that gained elevated trade benefits after becoming a major defense partner in 2016 3

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Controversy Over National Security and Conflicts of Interest

The decision has sparked concerns about national security and potential conflicts of interest. Michael Sobolik, a senior fellow at the Hudson Institute, told the Wall Street Journal: "The UAE has been a great partner with Iran, but that doesn't necessarily mean they've demonstrated the capability to keep a data center secure" 3

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. Critics argue that allowing the UAE greater access could harm the US in the AI race against China, with some expressing worry over the security of advanced computing power built outside the US 3

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Political scrutiny has focused on financial ties between Sheikh Tahnoon and the Trump family. Days before Trump's second inauguration, Tahnoon and other investors agreed to pay $500 million for a 49% stake in World Liberty Financial, the crypto company founded by Trump 4

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. Representative Sydney Kamlager-Dove stated: "It smells like it could be an illegal pay-to-play scheme" 3

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. Senator Elizabeth Warren, ranking member of the Senate Banking Committee, said: "We already know that the UAE royal behind G42 and MGX secretly bought a 49% stake in the Trump crypto company, World Liberty Financial. Now, Trump's Commerce Department is giving G42 license-free access to advanced AI chips" 5

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. The White House has denied any conflicts of interest 3

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Commerce Department official Jeffrey Kessler, whose office oversees export controls, stated he never discussed AI chip exports to the UAE with Trump family members or executives at World Liberty Financial, calling the UAE announcement "one of the most significant achievements of the administration" 4

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. The new status demonstrates how AI chips have become powerful economic leverage in international diplomacy, with the UAE's military partnership during the Abraham Accords and Operation Epic Fury translating into privileged access to technology that can shape the future of artificial intelligence development in the region.