U.S. Set to Expand AI Chip Access for UAE Amid Strategic Shift

• The UAE is set to gain expanded access to U.S. AI chips through a deal expected during President Trump’s Abu Dhabi visit on Thursday, aligning with U.S. security standards while balancing ties with China.
• State-linked UAE entities G42 and MGX, backed by a $1.5 billion Microsoft (MSFT) investment, are driving the emirate’s AI ambitions, with the Gulf potentially emerging as a third global AI hub alongside the U.S. and China.
• Trump’s administration is scrapping Biden-era chip export controls, criticized as overly complex, to boost innovation and U.S. interests, though concerns remain about technology leakage given the UAE’s Chinese trade links.

The United Arab Emirates is on the cusp of a transformative agreement with the United States to gain broader access to advanced artificial intelligence chips, a development expected to be sealed during President Donald Trump’s visit to Abu Dhabi on Thursday, according to a Reuters report. This deal represents a significant victory for the UAE, a major oil producer that has invested billions to establish itself as a global AI leader, despite previous restrictions under the Biden administration due to concerns about chip transfers to China, the UAE’s largest trading partner. The agreement, underpinned by a technology framework requiring mutual security commitments, as confirmed by a source to Reuters, enables the UAE to strengthen its technological alliance with the U.S. while maintaining trade relations with China, a recalibration described by Mohammed Soliman of the Middle East Institute as aligning with U.S. standards in compute, cloud, and chip supply chains.

The UAE’s AI ambitions, fueled by state-linked entities G42 and MGX, have already seen significant U.S. partnerships, including a $1.5 billion investment from Microsoft (MSFT) in G42 last year, secured with stringent security assurances, and investments in American firms like OpenAI and xAI. These efforts follow the UAE’s strategic shift to phase out Chinese hardware and divest from Chinese investments under U.S. pressure, though Chinese companies like Huawei and Alibaba Cloud maintain a presence in the emirate. Reuters reported in February that AI chip smuggling to China was traced through countries including Malaysia, Singapore, and the UAE, highlighting the challenges of securing advanced technology. The UAE’s push was further emphasized during President Sheikh Mohamed bin Zayed Al Nahyan’s December visit to Washington, where AI cooperation topped the agenda.

Under Trump’s administration, U.S. policy on AI chip exports has shifted markedly from Biden’s tiered controls, which restricted Gulf states’ access while blocking countries like China and Russia. Trump’s AI czar, David Sacks, stated in Riyadh on Tuesday that Biden’s export rules were not meant to hinder allies, a view echoed by the administration’s plan to eliminate blanket restrictions, which Russ Mould of AJ Bell, a UK-based investment platform and financial services company, criticized as overly complex. This policy change could allow the UAE to access cutting-edge chips from companies like Nvidia (NVDA), positioning the Gulf region as a potential third AI power hub alongside the U.S. and China, where most AI computing power currently resides. The Trump administration argues that easing controls fosters innovation and strengthens U.S. strategic interests. If the deals proposed during Trump’s Gulf tour materialize, particularly in the UAE, the region’s role in the global AI race could expand significantly, balancing economic diversification with geopolitical alignment.

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