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Nvidia (NASDAQ:NVDA) surges over 4.5% in early trade as the Trump administration weighs a landmark policy shift to ease restrictions on U.S. exports of advanced artificial intelligence processors to the United Arab Emirates, a move sources say could pave the way for a bilateral chip agreement that President Trump may unveil during his May 1316 visit to the Middle East.
According to Bloomberg, White House advisors have questioned why the UAEdespite its status as one of only 17 countries plus Taiwan allowed unlimited AI chip exports under the January 7 AI Diffusion Rulefaces stricter limitations than roughly 120 second-tier nations capped on volumes.
Under the rule, four third-tier countriesChina, Russia, Iran and North Koreaare entirely barred from acquiring top-end Nvidia accelerators like the H100 and A100, prompting calls for a policy overhaul ahead of Trump's trip; an Nvidia spokesperson declined to comment when contacted by Reuters.
The potential policy shift follows intense lobbying by Nvidia CEO Jensen Huang, who told regulators the AI Diffusion Rule is unprecedented and misguided for its risk of stifling innovation and economic growth globally, and by UAE national security advisor Sheikh Tahnoon bin Zayed Al Nahyan, who during private meetings in Washington pushed for increased access to AI accelerators.
Bloomberg sources say the administration could announce a formal chip-transfer framework during Trump's stop in Abu Dhabi, where the UAE's commitment to invest $1.4 trillion in U.S. sectorsincluding semiconductors, AI infrastructure and manufacturingover the next decade remains a focal point of bilateral talks.
Easing export constraints could unlock a broader Gulf market and shore up Nvidia's top-line growth at a time when tier-two caps and geopolitical friction threaten supply chains and valuation multiples alike. Investors should watch for formal guidance on permissible chip volumes and any disclosure of bilateral revenue targets post-announcement.
Investors will be watching Trump's May 1316 engagement in Abu Dhabi for the official unveiling of any U.S.-UAE chip pact and its implications for NVDA's global footprint.
This article first appeared on GuruFocus.