US ‘Nears Deal’ With UAE On Advanced AI Chips

The US has a preliminary deal with the United Arab Emirates that could allow it to import 500,000 advanced Nvidia AI chips per year starting in 2025, Reuters reported.

The deal could see 20 percent of the chips, or about 100,000 per year, go to UAE AI firm G42, with the rest going to US companies such as Microsoft and Oracle that are looking to build AI data centres in the Emirates, the report said.

The Emirates deal is through at least 2027, but could reportedly be in place until 2030.

Advanced AI chips

The preliminary deal reportedly specifies that for every data centre G42 builds in the UAE it build a similar one in the US.

What is considered an advanced AI chip will be decided by a separate working group to be formed later, along with security requirements, the report said.

The New York Times reported earlier this week that the White house was considering a deal that could send hundreds of thousands of US-designed AI chips to the UAE, in spite of opposition to the plan in Washington over national security risks.

The reported deal comes after the US this week rescinded a major trade barrier to the sale of advanced artificial intelligence (AI) chips, known as the “AI Diffusion Rule”, that was introduced in the closing days of the Biden administration.

Under that rule, announced in January, the UAE would have had access to only one-third or one-quarter of the computing power that is being offered in the deal that is now being negotiated, Reuters said.

Along with large deals with Saudi Arabia to buy AI chips from Nvidia and AMD, the deals currently on the table could turn the Middle East into a major provider of AI data centres after the US and China.

Many in Washington are opposing the relaxation of controls on AI chips, however, saying it could lead to Chinese companies either gaining physical access to advanced AI accelerators or accessing AI computing power via cloud services.

China concerns

White House AI adviser David Sacks met with Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and brother of the country’s president, who is also G42’s chairman, this week amidst a tour of the Middle East by US president Donald Trump.

The House Select Committee on China has long warned of the ties of G42, an Emirati AI company, with Huawei Technologies and other Chinese companies.

“We raised concerns about G42 last year for this very reason – and we need safeguards in place before more agreements move forward,” said Representative John Moolenaar, the top Republican on the panel, on social media.

Microsoft formed a deal with G42 in April 2024 that required the company to break off its existing relations with Huawei, in what the White House called a “positive development”.