U.S. Nears Agreement to Allow UAE to Import Nvidia's Advanced AI Chips

NEW YORK/DUBAI - The United States is reportedly on the verge of finalizing a preliminary agreement with the United Arab Emirates (UAE) that would permit the import of up to 500,000 advanced AI chips from Nvidia annually, with the arrangement set to commence in 2025. This development is expected to significantly enhance the UAE's capacity to establish data centers that are crucial for the advancement of artificial intelligence technologies.

According to sources familiar with the negotiations, the agreement is intended to remain in effect until at least 2027, with the possibility of extending to 2030. The draft stipulates that 20% of the imported chips, equating to 100,000 units per year, will be allocated to G42, a prominent UAE technology firm. The remaining chips will be distributed among various U.S. companies that operate large-scale AI initiatives, including Microsoft and Oracle, which are also eyeing opportunities to set up data centers within the UAE.

As the negotiations progress, there is a chance for alterations in the terms before finalization. Recent reports indicate that the agreement has encountered growing opposition from certain factions within the U.S. government. The Biden administration has implemented restrictions on the export of AI chips to regulate the distribution of these sophisticated processors globally, particularly to prevent them from being redirected to China, where they could enhance military capabilities.

In a related development, U.S. President Donald Trump recently embarked on a tour of Gulf nations, announcing commitments valued at $600 billion from Saudi Arabia, which include substantial purchases of chips from major manufacturers such as Nvidia, Advanced Micro Devices (AMD), and Qualcomm. Strengthening ties with Gulf countries has been a pivotal objective for Trump's administration.

The chips allocated to G42 under this proposed agreement would significantly increase the computational power available to the UAE compared to previous regulations established under former President Joe Biden. Reports suggest that the Trump administration is poised to repeal those prior limitations.

Currently, the bulk of AI computing power is concentrated in the United States and China. Should the various proposed agreements with Gulf nations, particularly the UAE, materialize, the region could emerge as a significant third hub in the global AI landscape.

The U.S. Commerce Department, responsible for overseeing export controls, has not issued any comments regarding the situation. Similarly, the White House, G42, and the UAE government have refrained from making immediate statements, while Nvidia has also chosen not to comment on the matter.

Additionally, the proposed agreement aims to foster the development of data centers in the U.S. The stipulations currently indicate that for every data center G42 establishes in the UAE, a corresponding facility must be constructed in the United States.

One of the sources mentioned that a separate working group would be formed to determine the criteria for what constitutes an advanced AI chip, along with the necessary security protocols. The chips in question are expected to include Nvidia's latest graphics processing units, with references pointing towards either the Nvidia Blackwell chips or the anticipated Rubin chips, both of which boast enhanced capabilities over their predecessors.