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The United Arab Emirates is getting broader access to prized US artificial intelligence chips after becoming a key military partner during the conflict with Iran – the latest instance of AI chips becoming a powerful bargaining chip in international diplomacy.
The UAE has carried out dozens of airstrikes, intercepted hundreds of missiles and helped keep oil flowing through the Strait of Hormuz.
Under a Trump administration rule announced Friday, the UAE is being placed in the same export category as European nations, South Korea and India for purchases of technology, military equipment and energy infrastructure with potential military uses.
The UAE was previously in the same category as countries including China and Yemen.
President Trump praised UAE President Sheikh Mohamed bin Zayed Al Nahyan during a recent Group of Seven summit in France.
“His Highness is a warrior,” he said. “They’ve been with the United States for a long time, but I would say much more so since I came on board.”
The Gulf nation has tried for years to secure cutting-edge American technology as it works to diversify its economy.
The decision is likely to face political scrutiny because it benefits a country whose national security adviser became a major business partner of the Trump family last year. The White House has denied any conflicts of interest.
“It smells like it could be an illegal pay-to-play scheme,” Rep. Sydney Kamlager-Dove (D-Calif.) said Tuesday during a House committee hearing.
Commerce Department official Jeffrey Kessler, whose office oversees export controls, said he never discussed AI chip exports to the UAE with Trump family members or executives at their World Liberty Financial, the crypto company founded by Trump, special envoy Steve Witkoff and their sons.
“It is one of the most significant achievements of the administration,” Kessler said of the UAE announcement.
The move will enable G42, the UAE’s flagship AI company, to buy Nvidia chips without restriction for at least the next nine months.
The rule change also lifts export hurdles for Microsoft and OpenAI, both of which have announced plans for data centers in the UAE.
“The U.A.E. has been a great partner with Iran, but that doesn’t necessarily mean they’ve demonstrated the capability to keep a data center secure,” Hudson Institute senior fellow Michael Sobolik told the Wall Street Journal.
Under the previous status quo, UAE companies had to obtain Commerce Department licenses before shipping the advanced chips needed to run AI models, a process that often stretched for months.
Industry analysts said the expanded access could be worth billions of dollars.
Emirati officials recently indicated that G42 could eventually become a US company with a majority of its ownership held by American investors, according to the Journal. The company is controlled by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and the brother of the president.
Tahnoon has spearheaded the country’s push for AI chips since the Biden administration.
After the war with Iran began, Emirati officials renewed their lobbying campaign with the White House, urging officials to upgrade the country’s export status, the Journal reported.
The UAE strengthened ties with Israel and several Arab nations by signing the Abraham Accords in 2020 before joining the US in military action against Iran.
One American official reportedly said that support convinced the White House and senior administration officials that the UAE had proven itself to be a dependable ally.
Days before Trump’s second inauguration, Tahnoon and other investors agreed to pay $500 million for a 49% stake in World Liberty Financial, drawing howls from Dems. Separately, the UAE pledged to invest $1.4 trillion in the United States.
UAE officials originally urged Washington not to launch a war against Iran. But after the Gulf nation absorbed major retaliatory drone attacks from Iran, officials shifted course and coordinated military strikes alongside the US and Israel.
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