The United States has approved billions of dollars’ worth of Nvidia (NASDAQ:NVDA) AI chip exports to the United Arab Emirates (UAE), marking a significant step in implementing a high-profile bilateral artificial intelligence agreement, according to a Bloomberg report.
In exchange, the UAE has pledged to match chip imports with an equivalent level of investment in the U.S., part of a broader promise to invest $1.4 trillion over the next decade. The Commerce Department’s Bureau of Industry and Security recently issued the export licenses under a deal reached in May, which could serve as a model for future U.S. AI diplomacy.
Specific investment projects have not been disclosed. The licenses are the first approved Nvidia AI chip exports to the Gulf nation since US President Donald Trump took office, and signify progress on a deal that has stirred controversy in Washington.
The agreement centers on a five-gigawatt data center in Abu Dhabi, where OpenAI (OPENAI) is a key partner. The broader agreement allows up to 500,000 advanced AI chips annually, with 20% earmarked for Abu Dhabi-based G42, an AI firm partnering with OpenAI. However, the initial batch of licenses excludes G42, and future approvals will depend on how Emirati investments materialize.
Some U.S. officials have voiced concern over building such critical infrastructure outside the U.S., especially in a country with strong business ties to China.
The UAE, which has made AI a national priority, has pushed aggressively for U.S. approval amid frustration over delays.
While the Biden administration had imposed strict controls on AI chip exports to nations like the UAE due to security concerns, the Trump administration is reversing that stance.
Officials say the goal is to counter China’s tech influence by ensuring American companies dominate critical infrastructure in the Middle East. Commerce Secretary Howard Lutnick recently said AI chip access will be allowed for allies only if operated by approved American data centers and cloud providers, reflecting a broader strategy of U.S.-controlled AI infrastructure abroad.