The United States has reached a preliminary agreement with the United Arab Emirates to facilitate the import of 500,000 advanced AI chips from Nvidia each year beginning in 2025, according to insider information.
This initiative is expected to support the UAE in establishing data centers that are crucial for the development of artificial intelligence applications.
Sources indicate that the agreement is likely to remain in effect at least until 2027, with the possibility of an extension through 2030.
The proposed deal specifies that 20 percent of these chips, or 100,000 units annually, will be allocated to the UAE-based tech firm G42, while the remainder is expected to be distributed among major US companies, such as Microsoft and Oracle, which are also planning to set up data centers in the UAE.
Negotiations regarding the agreement are still ongoing, and its terms may evolve before it is finalized. One insider noted that elements of this deal, first highlighted by the New York Times, are encountering increasing pushback from various sectors within the US government.
On the first day of Trump’s Middle East visit this week, US officials approved the sale of 18,000 Nvidia GB300 Grace Blackwell chips to an AI enterprise affiliated with Saudi Arabia’s Public Investment Fund.
The Biden administration has enacted restrictions on AI chip exports to manage the global distribution of these advanced processors, partially to prevent them from being redirected to China, where they could enhance military capabilities.
During his Gulf tour, President Trump announced commitments worth $600 billion from Saudi Arabia, including significant contracts for chip purchases from companies like Nvidia, Advanced Micro Devices, and Qualcomm.
Strengthening relationships with various Gulf nations has been a prominent objective of Trump’s administration.
The chips allocated to G42 under the UAE deal would represent a significant increase in computational capacity compared to what was permitted under previous regulations from the Biden administration. Last week, the Trump administration indicated plans to overturn that regulation.
Currently, the majority of AI computing resources are concentrated in the United States and China. If the anticipated agreements in Gulf nations, particularly the UAE, materialize, the region could emerge as a third hub in the global AI landscape.
The US Commerce Department, responsible for overseeing export regulations, declined to comment, as did the White House, G42, and the UAE. Nvidia also opted not to provide any remarks.
Shareholders in G42 include Abu Dhabi’s sovereign wealth fund Mubadala, the UAE ruling family, and the American private equity firm Silver Lake. Sheikh Tahnoon bin Zayed Al Nahyan, chairman of G42, serves as the UAE’s national security adviser and is related to the Emirates’ president.
The preliminary agreement additionally aims to foster data center development in the United States. It stipulates that for every data center G42 constructs in the UAE, a corresponding facility must also be built in the US, as per the sources.
One source mentioned that a dedicated working group would later define what constitutes an advanced AI chip, along with establishing security protocols.
The anticipated chip quantities are expected to pertain to Nvidia’s most advanced graphics processing units, potentially including the Blackwell chips, which outperform the previous Hopper generation, or the upcoming Rubin chips that exceed the capabilities of both earlier versions.
