(Bloomberg) — The US is weighing a potential easing of restrictions on Nvidia Corp. (NVDA) sales to the United Arab Emirates, according to people familiar with the matter, who said President Donald Trump could announce the start of work on a bilateral chip deal during his upcoming trip to the Gulf.
Nothing has been officially decided, the people said, emphasizing that the debate over semiconductor trade rules for the UAE and other countries remains ongoing in Washington. But talks about modifying AI chip curbs for the UAE in particular have been gaining steam at both the Commerce Department and the White House, said the people, who requested anonymity to discuss private conversations.
Any announcement would be unlikely to include specific details on how the UAE’s chip access would change, the people said. But a step toward an eventual accord would nonetheless be a win for the Gulf state, whose AI ambitions risk being curtailed by global chip rules unveiled during President Joe Biden’s final week in office. It would also provide a glimpse into how Trump views AI policy for places outside of China, as his administration debates how to proceed with the so-called AI diffusion rule, which set caps on AI chip exports to the UAE and some 100 other countries.
Nvidia shares extended gains after Bloomberg reported the news, climbing more than 5% in New York.
Trump is slated to visit the UAE as part of a broader Middle East trip from May 13 to 16 — meaning he will be in the region on May 15, the date that companies are currently required to start complying with the AI diffusion rule. On that trip, the president plans to emphasize that the UAE is a natural American ally that’s made major investments in the US, according to the people.
The president recently questioned why the US can’t sell chips to a nation approved to buy F-35 fighter jets, one of the people said, though the emirate is still in negotiations with the US on terms of those purchases. Trump’s comments followed a meeting with Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and brother of its president, who visited Washington in March in part to push for easier Nvidia chip access.
White House and Commerce Department spokespeople didn’t immediately respond to requests for comment, while representatives for Nvidia and the UAE embassy declined to comment.
During Sheikh Tahnoon’s trip, the UAE unveiled plans to spend as much as $1.4 trillion over the next decade on energy, semiconductors, AI infrastructure and manufacturing in the US. That pledge accelerated conversations about modifying chip restrictions on the UAE, people familiar with the matter said. Weeks later, Silver Lake — which counts Abu Dhabi-based sovereign wealth fund Mubadala Investment Co. as an investor — bought a majority stake in Intel Corp.’s Altera, which also helped nudge things in the UAE’s favor, according to a US official.
Additional UAE-led investments into the US tech sector are expected in coming months, according to people familiar with the matter. As part of the broader chip access talks, the people said, some Trump officials have floated seeking a bigger Emirati investment in Intel, the struggling American chipmaker at the center of the US government’s effort to make more semiconductors on American soil.
The administration’s discussions about including Intel in a potential UAE deal remain internal and in very early stages, the people said. A Mubadala spokesman said he wasn’t aware of any discussions regarding Intel, and Intel declined to comment.
On Wednesday, Nvidia Chief Executive Officer Jensen Huang urged the Trump administration to change regulations for exporting AI technology to help American businesses capitalize on opportunities overseas where competition with China is intensifying.
“I’m not sure what the new diffusion rule is going to be, but whatever it turns out to be, it really has to recognize that the world has changed fundamentally since the previous diffusion rule was released,” Huang told reporters in Washington. Nvidia has consistently argued that strict chip export rules from the US risk pushing other countries toward Chinese technology.
The US government has required a license to export Nvidia chips to the UAE and other Gulf nations since 2023, over concerns that the hardware could be diverted to China. The Middle Eastern country has long tried to assuage those worries, including with a promise by Abu Dhabi AI juggernaut G42 to divest from China’s Huawei Technologies Co. — which paved the way for a $1.5 billion partnership with Microsoft Corp. announced during the Biden administration. Microsoft has publicly called for the Trump administration to ease chip export controls on the UAE, among other “American friends.”
Emirati officials also were engaged in advanced negotiations with Biden officials to reach a government-to-government agreement on AI deployment, according to people familiar with those talks, which could have helped UAE companies bypass the national chip cap in exchange for security commitments — which also requires a separate, company-specific application. But the UAE abandoned those talks after Trump won the US presidential election in November, the people said, before the AI diffusion rule was formally unveiled.
Now, the country’s top government and industry officials are optimistic about their prospects under the new administration. The UAE isn’t viewed as “just another player,” Omar Al Olama, the country’s minister for AI and digital economy, said in a recent interview, pointing to partnerships between American and Emirati companies. The head of one of those companies, G42’s Peng Xiao, said the UAE is making “very good and tangible progress” toward securing advanced semiconductors from the US.
Still, it’s unclear what form that could take. Trump officials have been considering a suite of changes to the AI diffusion rule, Bloomberg News reported in March, including doing away with the tiered system in favor of a more general global licensing requirement. That could pave the way for individual countries, including the UAE, to negotiate their own agreements around chip access — which themselves may be enormously complex.
In the meantime, chip shipments to the country require ongoing approvals from US officials who hold differing views on the national security implications of the UAE’s AI push.
—With assistance from Marion Halftermeyer and Annmarie Hordern.
