US officials do not want to sell advanced AI chips to company run by UAE spy chief: Report
The UAE’s bid to buy hundreds of thousands of advanced AI chips from Nvidia is being held up by US officials concerned that China could gain access to advanced American technology, The Wall Street Journal reported on Thursday.
US officials are weighing whether or not to sell chips directly to a company owned by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE's powerful national security advisor.
Tech CEOs, diplomats, security officials and investors have all been waiting for clarity on whether the US would begin exporting Nvidia AI chips to the UAE as part of a much-hyped deal that President Donald Trump announced during a visit to the Gulf in May.
Bloomberg reported earlier this month that neither Saudi Arabia nor the UAE have been approved to receive the chips by the Commerce Department.
On Thursday, the WSJ reported that plans to export chips to the UAE have been delayed, as the US weighs new terms for a deal.
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The original agreement envisioned the UAE purchasing up to 500,000 of Nvidia’s most advanced AI chips annually, starting in 2025. Of that amount, 400,000 would go to US firms working on data centres and AI projects inside the oil-rich Gulf state.
But a big slice - 100,000 chips - is supposed to go directly to G-42, the state-owned AI firm run by Sheikh Tahnoon, who is also the UAE's AI czar.
Tahnoon, who sports aviator sunglasses because of an eye condition, manages the UAE’s most ambitious tech investments and has personally overseen outreach to the US.
His lobbying has been framed as a bet by the wealthy Gulf state on American technological prowess over China. He visited US President Donald Trump at the White House in March to lay the groundwork for the deals announced in May.
White House AI czar David Sacks, who spearheaded the deal, is seen as an advocate for pushing the sales through.
Supporters believe that if the US doesn't relax its restrictions, it could lose a valuable market in the Gulf to China. Huawei has approached both Saudi Arabia and the UAE to purchase AI chips, albeit not its most advanced ones, Bloomberg reported.
But US suspicion over the UAE’s commitment to safeguarding American technology hung over Trump’s visit. Trump stopped in Saudi Arabia, Qatar and the UAE in May. His trip to the UAE was the shortest and did not include a dinner like in Qatar and Saudi Arabia.
Middle East Eye revealed at the time that Trump’s National Security Council pushed to downplay his stop in the UAE, in part due to frustration over the Emiratis' perceived economic and military ties to China, one source briefed by the NSC told MEE. Trump has since fired many of those NSC officials.
Some US defence and intelligence officials were concerned that in his rush for deals, Trump overlooked concerns about how to secure the technology behind American weapons systems and AI from China.
The WSJ has reported that US officials want to cut off direct access to chips for G42. The Commerce Department doesn’t plan to approve any chips going to the Emirati state-owned group, the WSJ reported.
Trump would have the final say on exports. Just this week, he lifted his ban on Nvidia selling H20 artificial intelligence chips in China after meeting Nvidia CEO Jensen Huang. The decision lifted Nvidia's share price.
The UAE is interested in H100 chips, the most advanced AI chips produced by Nvidia. A single chip costs an estimated $25,000. Clinching the sale of 500,000 to the UAE would be a boon to Nvidia. The sheer number of chips underscores the Gulf region’s unrivalled buying power.
The UAE’s ambassador to the US, Yousef al-Otaiba, and Khaldoon al-Mubarak, the CEO and managing director of Mubadala, the Abu Dhabi sovereign wealth fund, attended an energy and tech conference with senior US officials in Pittsburgh this week.
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