By Federico Maccioni and Manya Saini
DUBAI (Reuters) -The United Arab Emirates is expected to secure a deal giving it expanded access to advanced artificial intelligence chips from the United States, after previously facing restrictions over Washington’s concerns that China could get its hands on the technology.
Such a long-coveted deal, expected to be finalised while U.S. President Donald Trump is in Abu Dhabi on Thursday, would be a major win for the UAE, which has been trying to balance its relations with its longtime ally the U.S. and its largest trading partner China.
The UAE, a major oil producer, has been spending billions of dollars in a push to become a global AI player. But its ties to China had limited access to U.S. chips under former President Joe Biden.
A source with knowledge of the matter told Reuters that the UAE and U.S. had finalised a technology framework agreement and that it would require commitments on both sides to the security of the technology.
The U.S. pursued protectionist policies for years to curb China’s access to advanced semiconductors, including ensuring the chips do not end up in the country via third parties.
Regulations appear to be easing under Trump, whose AI czar David Sacks said in Riyadh on Tuesday that the Biden administration’s export controls were “never intended to capture friends, allies, strategic partners”.
Granting the UAE more access to the most advanced chips, manufactured by firms like Nvidia, would be a major turnaround.
“This shift enables (the UAE) to deepen its technology partnership with the U.S. while still preserving trade ties with China,” said Mohammed Soliman, senior fellow at the Middle East Institute.
“It doesn’t mean abandoning China but it does mean recalibrating tech strategy to align with U.S. standards and protocols where it matters most: compute, cloud, and chip supply chains,” he said.
The vast bulk of AI computing power is currently deployed in the United States and China. If all the deals proposed during Trump’s tour of the Gulf states this week, in the UAE in particular, materialise, the region could become a third power centre in the AI race.
AI was top of the agenda when UAE President Sheikh Mohamed bin Zayed Al Nahyan visited Washington in December in the final days of Joe Biden’s presidency. G42 and MGX, the state-linked vehicles picked to drive the UAE’s AI investment push, have also invested in U.S. firms such as OpenAI and Elon Musk’s xAI, while Microsoft last year agreed to invest $1.5 billion in G42.
The two companies said the deal was backed by security assurances, and under U.S. pressure, G42 had previously began ripping out Chinese hardware it was using and sold off Chinese investments.
Still, major Chinese firms like Huawei and Alibaba Cloud are present in the UAE, and organised AI chip smuggling to China was tracked out of countries including Malaysia, Singapore and the UAE, a source told Reuters in February.
The Trump administration has said it will scrap the export controls, adding that blanket restrictions may backfire by pushing allies and emerging markets towards Chinese suppliers. It has said a more open approach could boost innovation and U.S. strategic interests.
“Trump administration officials have consistently derided the Biden government’s AI chip rules as excessively complicated,” Russ Mould, investment director at AJ Bell, said.
The previous controls divided the world into three tiers – giving unlimited access to some countries, limited access to middle-tier ones such as Gulf states and blocking access to “countries of concern” including China and Russia.
“The plan seems to be to open up the middle tier, as evidenced by the President’s tour to the Middle East, although there are still complications,” he said.
(Reporting by Federico Maccioni, Manya Saini, Maha El Dahan, Yousef Saba and Hadeel Al Sayegh in Dubai, Laurie Chen in Beijing, editing by Kirsten Donovan)
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