U.S. approves AI chip exports to Gulf after Saudi Crown Prince visit

The U.S. has approved sales of advanced Nvidia chips to Saudi Arabia’s HUMAIN and the United Arab Emirates’ G42, authorizing the state-backed firms to buy up to 35,000 chips, worth an estimated $1 billion.

The approval of these chip exports marks a major reversal for the U.S., which had previously balked at the idea of direct exports to state-backed AI companies in the Gulf. Export controls were put into place to avoid advanced American technology making its way to China through the back door of Gulf Arab states.  

Before former President Joe Biden left office in January, he administered a final round of export restrictions on advanced AI chips, targeting companies like Nvidia, in a sweeping effort to keep that cutting-edge U.S. intellectual property out of China’s reach.

Now, President Donald Trump is moving to expand the reach of such advanced technology in order to “promote continued American AI dominance and global technological leadership,” the U.S. Commerce Department said in a statement published on Wednesday. 

“The Trump administration’s approach to the race for AI leadership against China is markedly different to that of the Biden administration,” Hasan Alhasan, senior fellow for Middle East Policy at the International Institute for Strategic Studies, told CNBC.

The U.S. Commerce Department approved the chip exports, with the condition the state-backed AI outfits agree to “rigorous security and reporting requirements,” overseen by the Department of Commerce’s Bureau of Industry and Security.

“The safeguards to which Saudi Arabia has agreed are still unknown,” Alhasan said, adding that the UAE undertook “far-reaching measures to assuage U.S. concerns including replacing its Chinese-developed AI stack, letting go of Chinese personnel and divesting its Chinese tech holdings.”

“We have what we’ve designed as a gold standard called the regulated technology environment, which really helps us ensure that we protect and preserve the security imperatives of this consequential technology,” Talal M. Al Kaissi, acting group chief global affairs officer at G42, told CNBC’s Dan Murphy on Friday, when asked about the specifics of such safeguards.

The export approval follows Saudi Crown Prince Mohammed bin Salman’s trip to Washington this week where the Kingdom pledged to spend $1 trillion in the U.S., up from $600 billion originally committed during Trump’s Gulf tour in May.

“Even if we don’t get to that, both sides have skin in the game,” Afshin Molavi, senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies, told CNBC’s Dan Murphy.

Saudi Arabia’s AI company HUMAIN, backed by its nearly $1 trillion Public Investment Fund signed a long list of partnerships with Adobe, Qualcomm, AMD, Cisco, GlobalAI, Groq, Luma, and xAI at a U.S.-Saudi Investment Forum held in Washington, D.C this week. Notably, HUMAIN will be teaming up with Elon Musk’s xAI to build a 500 megawatt data center in the Kingdom.

“What we want to do in 2026 is to build the capacity equivalent to what Saudi has built in the last 20 years, in one year,” Tareq Amin, CEO of HUMAIN, said at the summit. HUMAIN is hoping to position Saudi Arabia as the third biggest global AI hub, after the likes of the U.S. and China.

Just two weeks ago, Microsoft secured an export license for advanced chips to the UAE. Microsoft’s key partner in the UAE is G42, but the local AI company was notably absent from the Microsoft announcement, until today.

“There are several security imperatives that the U.S. government has on technologies that are of this type of consequence,” G42’s Al Kaissi told CNBC, when asked about compliance obligations from the U.S. Commerce Department. One is “physical security” to avoid the risks of diversion, he added. “That’s one that we’ve been able to lock down through our regulated technology environment.”