Trump’s AI Chip Export Policy Shift: High Stakes for the U.S.
President Trump’s recent trip to the Middle East involved brokering the sale of a significant number of AI chips made in the U.S. to companies in the UAE and Saudi Arabia, marking a notable change in U.S. policy regarding advanced AI technology. The previous approach was to restrict access to these powerful chips, particularly to nations considered potential security risks. Now, Trump is using these chips to further his broader trade objectives.
During the Saudi-U.S. Investment Forum in Riyadh, the White House announced Saudi Arabia’s commitment to invest $600 billion in the U.S., aiming to create lasting economic bonds. Nvidia’s CEO, Jensen Huang, revealed a major partnership with Humain, a new company owned by Saudi Arabia’s Public Investment Fund, and pledged to provide them with chips. AMD also announced its $10 billion project in Saudi Arabia. Another agreement is reportedly being finalized with the Emirati firm G42.
While Trump’s allies view these deals as beneficial for all involved, some national security experts are concerned about the long-term implications of distributing these chips globally.
Janet Egan, a senior fellow at the Center for a New American Security (CNAS), warns against using AI chips as bargaining tools for broader trade deals. She emphasizes their importance in maintaining U.S. AI dominance and cautions against short-term trade benefits that could jeopardize long-term AI leadership.
Earlier in the year, the Chinese company Deepseek revealed its development, largely using Nvidia chips acquired before the Biden administration closed an export loophole in 2023, intensifying the competition. In his final weeks, President Biden increased export controls, including restrictions on countries in the Gulf.
The Trump administration recently revoked these regulations, with a spokesperson describing them as “overly complex, bureaucratic” and detrimental to American innovation. They have shifted to a strategy of linking AI chip access to broader trade negotiations. This negotiation-based approach, according to the administration, offers greater flexibility and allows Trump to secure key business concessions from Middle Eastern partners.
Businesses and governments in the Middle East have ambitious AI plans, seeking to become leaders in this emerging technology. They have advantages such as abundant energy resources, readily available capital from oil and sovereign wealth funds, and fewer government regulations, facilitating rapid infrastructure development. However, until now, access to cutting-edge American chips from companies like Nvidia has been a missing component.
The number of chips that U.S. companies are reportedly sending to the UAE and Saudi Arabia is substantial. Alasdair Phillips-Robins, a fellow at the Carnegie Endowment for International Peace, states that it could be “larger than any AI training system that exists in the world today.” The powerful models created with this training system could potentially automate cyber-attacks, intelligence gathering, and weapons development.
This situation is concerning to some U.S. analysts, given Saudi Arabia and the UAE’s ties with China. In the past, American spy agencies have issued warnings about G42 potentially transferring advanced American technology to China. G42 has denied any connections to the Chinese government or military.
Egan believes that a non-democratic authoritarian regime should not be leading the future of such a critical and transformative technology.
The House Select Committee on the Chinese Communist Party, led by Michigan Republican John Moolenaar, stated on Twitter that the new chip deals “present a vulnerability for the CCP to exploit.”
Sam Winter-Levy, another Carnegie Endowment fellow, fears that the deal will incentivize U.S. AI companies to relocate to the Gulf, where they might find better energy deals and avoid U.S. regulations and public opposition. Major U.S. companies are already taking advantage of the opportunity presented by the Trump administration. OpenAI’s Sam Altman, Nvidia’s Jensen Huang, and AMD’s Lisa Su all attended the forum. The AI startup Scale AI, which partners with the U.S. government to develop AI safety standards, plans to open an office in Saudi Arabia. Google, too, is establishing an AI hub in the country.
Winter-Levy warns that a significant portion of U.S. computing power could be offshored to countries that could use leverage over U.S. foreign policy in ways that may not align with U.S. national interests.
Winter-Levy also argues that these AI chip deals contradict Trump’s previous emphasis on an “America first” foreign policy. He points out that these are data centers and chips that could be built and used in the United States. He finds it difficult to reconcile this with an America First approach to industrial or economic policy.