US approves AI chip exports to UAE, as talks progress with Saudi Arabia: Report

The US has approved the export of billions of dollars in AI chips to the UAE and is nearing an agreement with Saudi Arabia to do the same, according to media reports.

Nvidia was granted a licence by the Commerce Department’s Bureau of Industry and Security to export chips to the UAE, where US artificial intelligence firm OpenAI is set to operate a sprawling data centre, Bloomberg reported on Thursday.

The UAE agreed to buy hundreds of thousands of Nvidia’s most advanced AI chips in May, when US President Donald Trump visited the Gulf region. The deal, however, has faced setbacks due to some US officials' concerns about the UAE’s ties to China.

The original agreement signed between the US and UAE envisioned the Gulf state purchasing up to 500,000 of Nvidia’s most advanced AI chips annually, starting in 2025. Of that amount, 400,000 would go to data centres and AI projects managed by US firms inside the UAE.

But a big slice - 100,000 chips - is supposed to go directly to G-42, the state-owned AI firm run by Sheikh Tahnoon bin Zayed, who is also the UAE's AI czar and spy chief.

Nvidia’s stock was trading up two percent on Thursday afternoon.

According to Bloomberg, the initial licence does not include any chips for G-42. The Wall Street Journal previously reported that US officials want to cut off direct access to chips for G42.

In return for agreeing to sell the chips, the US obtained a pledge from the UAE to match in foreign direct investment into the US what it receives in AI chips on a dollar-for-dollar basis. That would come to around $1.4 trillion over ten years.

Trump secured tens of billions of dollars in investment pledges from the UAE, Saudi Arabia and Qatar when he visited the region in May, but tracking the loose investment pledges has been difficult.

Saudi Arabia is also eyeing AI chips, but progress has been slow in talks with the US. The Wall Street Journal also reported on Thursday that the US was making progress in talks with Saudi Arabia, where some US officials also have concerns about China gaining access to US technology.

The talks between the US and Gulf states have been ongoing since May, but the progress comes as Trump prepares to head to the region, where he will oversee a signing ceremony to bring Israel’s war on Gaza to an end. The US plans to lean heavily on Gulf states like Saudi Arabia and the UAE for Gaza’s reconstruction and security.