The United States has signaled a significant shift in its technology export policy, approving the sale of advanced AI chips to state-backed entities in Saudi Arabia and the United Arab Emirates. This move, a notable reversal from previous apprehensions about direct exports to Gulf-based AI firms, comes with stringent security and reporting mandates. The beneficiaries, Saudi Arabia's HUMAIN and the UAE's G42, are now authorized to acquire up to 35,000 Nvidia chips, a deal valued at approximately $1 billion.
This decision by the U.S. Commerce Department under President Donald Trump contrasts sharply with the former Biden administration's efforts to restrict the flow of cutting-edge American AI intellectual property, particularly to prevent its indirect transfer to China through Gulf intermediaries. President Trump's administration, however, asserts that expanding access to such technology will bolster "American AI dominance and global technological leadership." The rigorous security and reporting requirements, overseen by the Commerce Department's Bureau of Industry and Security, are designed to mitigate risks.
The timing of this approval is particularly significant, following Saudi Crown Prince Mohammed bin Salman's recent visit to Washington. During this high-profile trip, the Kingdom dramatically increased its investment pledge to the U.S. from an initial $600 billion to an astounding $1 trillion. Experts, like Afshin Molavi of Johns Hopkins University, note that such substantial commitments demonstrate both nations' vested interests.
Saudi Arabia's Vision for AI Leadership
Saudi Arabia's state-backed AI powerhouse, HUMAIN, funded by its nearly $1 trillion Public Investment Fund, seized the opportunity at the U.S.-Saudi Investment Forum in Washington, D.C., to forge a multitude of strategic partnerships. Collaborations were announced with tech giants including Adobe, Qualcomm, AMD, Cisco, GlobalAI, Groq, Luma, and notably, Elon Musk's xAI. A highlight of these alliances is HUMAIN's ambitious plan with xAI to construct a monumental 500-megawatt data center within the Kingdom.
HUMAIN CEO Tareq Amin articulated the Kingdom's audacious goal: to achieve AI infrastructure capacity in a single year (2026) equivalent to what Saudi Arabia has built over the past two decades. This aggressive expansion aims to cement Saudi Arabia's position as the world's third-largest global AI hub, following the U.S. and China.
The Gulf's Growing Tech Ambitions
Kamil Dimmich, a partner at North of South Capital, highlighted the strategic advantages of G42 and HUMAIN, emphasizing their substantial capital, established relationships with Nvidia, and now, the crucial backing of the U.S. government. Dimmich believes these entities are poised to "build out regional infrastructure" and, by leveraging it, transform into "global hubs for compute."
The increasing integration of Gulf entities into the advanced tech landscape is further underscored by Microsoft's recent securing of an export license for advanced chips to the UAE, with G42 being a key local partner. This broader trend indicates a burgeoning tech ecosystem in the Gulf, fueled by strategic partnerships and significant investment.
