UAE, US on verge of 500,000 AI chip annual quota deal
Trump expected to announce massive UAE AI chip export deal today
#UAE #AIchips - The UAE is on the verge of signing a historic agreement with the Trump administration allowing it to import 500,000 of Nvidia’s most advanced AI processors annually, according to sources quoted in a Reuters report. The deal will position the fast-rising AI power as a formidable international artificial intelligence hub and allow the nation’s digital transformation to deploy the latest AI platforms and solutions. The preliminary agreement allows the United Arab Emirates to import half a million advanced Nvidia processors annually from 2025, potentially extending until 2030, with Abu Dhabi-based tech firm G42 receiving 100,000 chips annually (20%) while other key tech firms and enterprise customers in the UAE, including US giants Microsoft and Oracle, would likely share the remainder of the quota.
SO WHAT? - The agreement represents a dramatic reversal of Biden-era export restrictions introduced over the past couple of years and signals President Trump's willingness to share critical AI infrastructure with strategic allies. If finalised, the deal would allow the UAE to continue its rapid ascension as a global AI player, develop state-of-the-art AI models and platforms, and continue to attract cutting edge technology firms from around the world.
The UAE and the USA have negotiated a draft agreement allowing the UAE to import 500,000 of Nvidia’s most advanced AI processors per annum, according to a new Reuters report.
The agreement is expected to be announced during President Trump's state visit to the UAE today and follows his announcement of $600 billion worth of investment commitments from Saudi Arabia, including over $40 billion of data centre and AI chip deals from AMD, AWS, Nvidia, Qualcomm and others.
Under the draft arrangement, Abu Dhabi;s AI powerhouse G42, would receive 20% of the annual allocation (100,000 chips), representing a three to four-fold increase in computing power compared to Biden administration allowances.
The agreement includes provisions requiring G42 to build an equivalent data centre in the United States for every facility constructed in the UAE, ensuring reciprocal investment in American infrastructure. G42 appointed a CEO for their planned US operations in November last year.
The Trump administration last week announced plans to rescind Biden-era export controls that had placed strict limits on advanced chip exports, which Gulf nations had viewed as obstacles to their national AI development plans.
The deal faces growing opposition within the US government, with some officials concerned about potential technology diversion to China and national security implications of sharing cutting-edge AI infrastructure.
The chips covered by the agreement reportedly include Nvidia's most advanced processors, potentially including current Blackwell chips and forthcoming Rubin models that exceed previous generation capabilities.
A separate working group will be established to precisely define what constitutes an "advanced AI chip" and determine appropriate security requirements for the technology transfer.
The UAE has worked diligently to address US security concerns, with G42 removing Chinese networking equipment from its operations in favor of American vendors and strengthening partnerships with US companies including Microsoft, AMD, Cisco, and Qualcomm.
During a March visit to Washington, UAE officials committed to investing $1.4 trillion in the United States over the next decade, with significant allocations for AI and semiconductor development.
ZOOM OUT - The new AI chip export deal marks a fundamental shift in America's technology export policy and its approach to AI export controls. Last week, the Trump administration confirmed plans to rescind restrictions on advanced AI chips that were hastily introduced in January during Biden's final days in office. Those regulations, which were scheduled to take effect this week, would have imposed even more stringent limitations on already restrictive export controls introduced during October 2022 and October 2023. The Biden-era controls had become a significant obstacle for Gulf nations' AI ambitions, forcing Saudi Arabia and the UAE to delay, redesign, or even cancel critical high-performance computing projects. The UAE deal represents the culmination of bilateral negotiations between the UAE and USA, lobbying by major US tech firms and the efforts of the Trump administration to create simpler, more effective export controls for AI that allow US technology firms to maintain their tech leadership globally.
[Written and edited with the assistance of AI]
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