The US administration is considering easing export restrictions on the UAE to allow it to buy powerful semiconductors and graphics processing units for artificial intelligence infrastructure.
After several months of lobbying by Nvidia, Microsoft and other companies, the White House is looking at possible ways it could best ease the restrictions as President Donald Trump prepares for his visit to the UAE, according to a source.
Those options could include giving Nvidia the ability to sell chips to the UAE, which has great AI ambitions, without restrictions, although other ideas are also being discussed.
A link to a Bloomberg report referring to a possible Nvidia and UAE exception is linked on the Emirates' US embassy website's news section.
The controversial policies at the root of this concern were introduced in the final months of the administration of president Joe Biden, and were set to go into effect on May 15.
The export rules were largely driven by a fear that US AI chip technology would be used by countries including China, with which the US has an increasingly adversarial relationship.
Under the chip export rules, also known as the AI diffusion rules, countries would be split into tiers that would determine how many powerful chips and GPUs they could buy.
Falling into the first tier and unaffected by the rules are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the UK.
Other countries, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE and Saudi Arabia, would fall into a second-tier category, making it more difficult – although not impossible – to obtain the chips needed for AI research and development.
The third tier of countries – China, Iran, North Korea, Russia, Syria and Venezuela – will have the most difficulty obtaining GPUs and CPUs under the new rules, if they are applied.
Early in 2025, US technology and AI giants such as Microsoft and Nvidia came out strongly against the diffusion rules.
“Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecoms a decade ago,” Microsoft's president and vice chairman Brad Smith wrote on the company's AI blog in February.
Ned Finkle, vice president of government affairs at Nvidia, which makes many of the chips affected by the AI diffusion policy, said the Biden administration sought to “undermine America’s leadership with a 200-plus-page regulatory morass, drafted in secret and without proper legislative review”.
Nvidia and Microsoft have said the policy could have unintended consequences by pushing countries to buy from China instead of the US.
Indications that the White House is considering giving Nvidia approval to sell chips to the UAE without restrictions comes a day after the company's chief executive Jensen Huang told reporters in Washington that the rules are already antiquated.
“I’m not sure what the new diffusion rule is going to be, but whatever it turns out to be, it really has to recognise that the world has changed fundamentally since the previous diffusion rule was released,” he said, referring to China-based companies such as DeepSeek and Huawei making strides in AI.
Nvidia did not immediately respond to The National's requests for comment.
On Tuesday, a Reuters report suggested that White House officials were considering scrapping the AI chip tiers designed by the Biden administration and replacing them with “government-to-government” agreements.
The source told The National the report is in line with what US officials have been telling the UAE in terms of possible options around the export rules, but that US policymakers have not yet indicated specifics or finality to any changes.
The controversy over chip export policies is not necessarily new. Back in 2023 as AI investments were reaching a fever pitch, the US curtailed shipments of some Nvidia and other semiconductors to various parts of the world, including the Middle East out of concern for national security.
During a March visit to the White House, UAE officials discussed strengthening economic partnerships with the US, as well investments and matters related to artificial intelligence and high-performance microchips.
That visit concluded with White House announcing the UAE had committed to a $1.4 trillion investment framework related to artificial intelligence infrastructure, semiconductors, energy and manufacturing.
The UAE, the Arab world’s second-largest economy, has made significant investments in recent years related to artificial intelligence.
In 2019, the country was among the first in the world to open a university dedicated to AI – the Mohamed bin Zayed University of Artificial Intelligence.
And last year, Microsoft announced a $1.5 billion investment in UAE AI and cloud company G42. Microsoft also opened its first Middle East AI for Good Lab in Abu Dhabi in 2024.
The UAE has created several large language models, including Jais. Jais Chat, a mobile app iteration of Jais, also made a major impact in the country, as it uses Arabic and English.
The Stanford Institute for Human-Centred AI announced that the UAE ranked fifth on the 2024 Global Vibrancy Tool, with the high ranking largely attributed to the country's continued interest in the technology.
As the UAE continues to focus on diversifying its economy away from oil, it is expected to continue to concentrate on AI investment and research.
