UAE Nvidia AI Chip Deal Reportedly Paused

AI Chip Deal Between U.S. and UAE Facing Delays

A substantial artificial intelligence agreement between the United States and the United Arab Emirates (UAE) is currently stalled prior to finalization, reportedly due to considerations surrounding national security.

Concerns Over Potential Diversion to China

The agreement would authorize the UAE to procure AI chips valued at billions of dollars from Nvidia and other semiconductor manufacturers. However, the deal is now paused because of U.S. anxieties that these AI chips could ultimately be transferred to China, as reported by The Wall Street Journal.

Sources indicate that the possibility of chip diversion was initially acknowledged during the deal's formation. Officials representing both the UAE and Saudi Arabia reportedly provided assurances regarding the implementation of protective measures.

Increased Scrutiny of Chip Exports

The risk of chip smuggling to China has grown in prominence over recent months.

It is speculated that the former Trump administration is evaluating the imposition of export restrictions on chips to Thailand and Malaysia as a preventative measure against illicit trafficking.

Recent Export Control Measures

Malaysia recently implemented a new requirement for export permits pertaining to U.S.-origin AI chips, effective Monday.

This action underscores the heightened vigilance surrounding the export of sensitive technologies and the efforts to prevent their unauthorized access by potentially adversarial nations.

Key Concerns Summarized

• The U.S.-UAE AI deal is paused due to national security concerns.
• The primary worry is the potential for AI chips to be smuggled into China.
• UAE and Saudi Arabia previously assured the U.S. of safeguards.
• Increased scrutiny is being applied to chip exports from multiple countries.
• Malaysia has introduced new export permit requirements.