(July 11): The Trump administration plans to ease export restrictions on the United Arab Emirates (UAE), clearing the way for the Gulf state to buy a broad range of advanced technologies including semiconductors needed to boost its artificial intelligence (AI) ambitions.
Under a notice released on Friday, the Commerce Department said that the UAE now qualifies for easier treatment under US export control laws, citing steps taken by the emirates to safeguard sensitive American technology. The rule change from the department’s Bureau of Industry and Security also cited the UAE’s support for the US in the war against Iran.
The move means that the UAE government and certain approved commercial ventures, including its tech champion G42, no longer need a US government licence to purchase cutting-edge AI chips from Nvidia Corp and Advanced Micro Devices Inc. The new rule sets no caps on how many chips or other sophisticated goods can be sold to those entities.
In a statement posted on X, UAE Ambassador Yousef Al Otaiba hailed the decision, saying it “affirms and advances decades of deep and dependable UAE-US cooperation in technology, security, trade and investment”. Spokespeople for the Commerce Department, Nvidia and AMD did not respond to requests for comments.
Since US President Donald Trump’s return to office, his administration has pushed to boost exports of US technology, especially AI. Trump made AI investments a centrepiece of his visit last year to the Middle East, with a series of deals between Silicon Valley giants and ventures in the UAE and Saudi Arabia.
In recent years, the UAE has directed considerable amounts of the nation’s oil wealth — and political capital — towards computing infrastructure, part of its effort to become an AI hub for the region as well as the global South. That was before the US and Israeli war against Iran, during which multiple data centres have been hit in the Gulf, leading to concerns about the region’s ability to attract overseas tech investments.
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The policy change drew immediate objections from national security hawks in Washington who have expressed concern that allowing wider sales of AI chips to the UAE could pose a threat to the US. Chris McGuire, a senior fellow at the Council on Foreign Relations who previously served in the Trump and Biden administrations, warned that it could allow China to access American technology while also stalling the AI roll-out in the US.
“This will pose enormous national security risks, as the UAE will become one of the most important AI compute hubs in the world, just as it now is for oil, but also a backdoor for China,” McGuire wrote on Friday on X. “Most importantly, it will exacerbate the already extreme supply shortage for AI chips in the US, slowing the US AI buildout.”
National security concerns centre on the risk that China could access AI processors sent to the UAE, through physical diversion of the chips or by tapping their capabilities via the cloud. China hawks have pointed in particular to G42, which has historic ties to Huawei Technologies Co but more recently has sought to disengage from the Chinese tech giant.
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With the move, the US has shifted the UAE to a different country category giving it access to high-tech American products with fewer licensing requirements. The rule change also loosens restrictions on sales of commercial satellites and spacecraft, as well as military equipment and products used in civilian nuclear power generation, opening the door for a wide range of US manufacturers to benefit.
The decision paves the way for the US and the UAE to significantly expand cooperation in developing AI, including investments by American tech giants in the emirate. For example, G42 is partnering with OpenAI and Oracle Corp on a five-gigawatt data centre cluster in Abu Dhabi, and it has sought to buy AI chips from Nvidia, AMD and Cerebras Systems Inc.
Yet those joint initiatives with the UAE have been delayed at times by US licensing restrictions. Late last year, after months of deliberations, the Commerce Department approved the sale of tens of thousands of advanced AI chips to G42. The rule changes announced on Friday would allow G42 to make similar purchases of chips in the future free of a licensing requirement.
Andrew Feldman, the chief executive officer of Cerebras, hailed the administration’s decision to ease restrictions on the UAE. “The UAE has been an exceptional ally to the US,” Feldman said on Friday. “It is a good policy to ensure that those who support our values remain within our technology ecosystem.”
UAE ventures cleared for licence-free purchases of AI chips also include G42’s Core42 unit. MGX, an Abu Dhabi fund backed by G42, was separately approved for favourable treatment. The rule change also allows eight US-headquartered companies and their UAE subsidiaries to buy AI processors without a licence: Amazon.com Inc, Alphabet Inc’s Google, Apple Inc, Meta Platforms Inc, Microsoft Corp, OpenAI, Oracle and SpaceX unit xAI.
The notice, signed by Bureau of Industry and Security director Jeffrey Kessler, cited the growing trade ties between the US and UAE, highlighting what it estimated as foreign direct investment from the emirates valued at more than US$1 trillion ($1.3 trillion) in areas ranging from AI and metals to aviation and energy.
Commerce Department officials unveiled the changes as US lawmakers weigh a series of bills aimed at tightening export controls on sales of AI chips and semiconductor-making technology. The measures have faced stiff opposition from the White House and the chip industry.
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Democratic US Senator Elizabeth Warren called on Kessler and Commerce Secretary Howard Lutnick to appear before the Senate Banking committee to explain the decision. In a statement, she said the move took place “despite reported concerns about the diversion of sensitive technology to China and other national security risks”.
Kessler is scheduled to appear on Tuesday before the House Foreign Affairs Committee for a hearing on US export control programmes.
Uploaded by Tham Yek Lee
