The United States has temporarily suspended a deal between the United Arab Emirates and NVIDIA to purchase hundreds of thousands of advanced AI chips. According to The Wall Street Journal, some Trump administration officials are concerned that the technology could end up in China due to the UAE's alleged cooperation with local entities linked to Beijing.
At the center of the dispute is the participation of G42, an Emirati AI company that was supposed to receive up to 20% of the chips as part of the deal. The US Department of Commerce currently does not plan to allow it to supply chips. This could force a review of the terms of the agreement.
Despite President Trump's support for the deal and NVIDIA CEO Jensen Huang's personal involvement in the negotiations, the deal has yet to be finalized. It is being pushed by Commerce Secretary Howard Latnick and White House top AI adviser David Sachs, who has called the concerns "overblown" and urged not to lose the strategic initiative in the region.
Most of the chips under the deal were to go to American companies, including Microsoft and OpenAI, which are building data centers in the UAE. It was previously reported that they plan to create the largest AI campus outside the United States. At the same time, the export of such chips requires approval from several American agencies.
Against this backdrop, China, particularly Huawei, is trying to fill the vacuum and promote its own AI solutions in the region. Gulf governments, including the UAE and Saudi Arabia, are viewing AI investments as a path to economic transformation.
Technology leakage risks, uncertainty over export regulations, and internal disputes in the US could jeopardize one of the biggest AI deals of the year.
By the way, it recently became known that NVIDIA is preparing to resume sales of H20 chips to China after regulatory changes. According to US Commerce Secretary Howard Latnick, this decision is related to negotiations between the US and China on trade in rare earth elements, which are critical for modern technologies, in particular for electric vehicle batteries. China is the main supplier of such elements.