President Trump’s eagerness to finalize an artificial intelligence contract during his Middle East travels is causing some tension within his administration, particularly among the so-called “Chinese hawks.” These officials are increasingly wary of the implications.
The Trump administration plans to acquire a significant number of semiconductors from Nvidia and Advanced Micro Devices in collaboration with Saudi partners. Shipments to the UAE could potentially exceed a million accelerators, mainly for projects associated with U.S. companies. These chips are essential for developing AI technologies that mimic human intelligence, a key asset in the current tech landscape.
Some senior officials are expressing concerns that the U.S. has not established sufficient safeguard measures to ensure that these chips won’t ultimately benefit China. While the UAE-Saudi agreement includes language intended to restrict access by Chinese firms, insiders note that many details are still unresolved, suggesting that it might be premature to announce the deal without legally binding stipulations in place.
The “Chinese hawks” in the administration were also taken aback by the views of White House AI advisor David Sachs, who sees the Gulf leaders’ proposals as a national security risk. These proposals aren’t reflected in any current agreements in the region.
Beyond security considerations, some Trump officials are questioning the wisdom of exporting vast amounts of chips outside the U.S., especially given the administration’s priority on maintaining dominance in AI. As Vice President JD Vance noted at the Paris AI Summit earlier this year, the focus is on ensuring that America’s most advanced AI systems utilize domestically designed and manufactured chips.
If all the planned transactions with Middle Eastern partners materialize, the U.S. will still command a considerable portion of global computing power. However, it will mark a significant development, as the Gulf countries will have access to top-tier U.S. hardware.
White House officials did not provide an official response to this situation, which is based on discussions with several insiders who spoke anonymously. Nvidia and a representative from the UAE declined to comment, and neither Sachs, AMD, nor the Saudi government responded to requests for input.
Proponents of these semiconductor deals argue that if the U.S. doesn’t promote its chips globally, countries looking to advance in AI will turn to alternatives from Chinese companies.
Sachs emphasized the need for strategic partnerships with countries like Saudi Arabia, stating that the risk of technology ending up in China is minimal with allies like them.
Not everyone in the Trump administration shares this perspective. In recent discussions, some senior officials have contemplated delaying the Gulf AI deal’s implementation, particularly a potential agreement between the U.S. and the UAE that might involve significant projects by OpenAI, known for its ChatGPT technology.
Trump’s visit began in Abu Dhabi, following stops in Saudi Arabia and Qatar earlier that week. Sources indicate that negotiations were still occurring on the day of the president’s arrival.
As these developments unfold, the “Chinese hawks” may voice their concerns through the regulatory framework in Washington. Shipping AI chips to the Gulf Coast will necessitate U.S. government approval, which involves several federal agencies. Additionally, officials are working on drafting export control regulations for semiconductors, having moved away from a framework established under President Biden, allowing for a chance to incorporate security measures aimed at China.
Sachs and others backing the Gulf initiative argue that imposing stringent security clauses would be a strategic win for the U.S., crucial for preserving leadership in AI.
A recurring argument from Sachs and industry leaders like Nvidia’s CEO is that, given the U.S.’s current lead over China in advanced chip manufacturing, restricting access to these technologies could lead to the U.S. surrendering markets to its geopolitical rivals. Companies might opt for chips from Huawei, a major Chinese tech company, further bolstering Beijing’s ambitions.
Conversely, some officials, from both the Trump and Biden administrations, contend that the U.S. lead in technology remains substantial, allowing Washington to set the rules as long as foreign nations still desire American chips. These officials advocate that countries should not gain access to premium U.S. hardware without significant concessions or security guarantees.
Trump officials seem to feel a growing pressure regarding strategic chip shipments in the Middle East after the UAE and Saudi Arabia invested $2.4 trillion in the U.S. to facilitate recent AI agreements. A number of senior officials are becoming hesitant about the approach endorsed by Sachs, a key advocate on the ground, as tensions between government and tech executives begin to surface.
In a meeting with Emirati officials prior to Trump’s visit, Sachs demonstrated a willingness to engage with the UAE’s aspirations for chip manufacturing, specifically referencing Taiwan Semiconductor Manufacturing Co., which produces chips for Nvidia and AMD. The UAE has actively sought U.S. support for such endeavors.
Some Trump officials see the potential TSMC facility in the UAE as a risk, concerned that supporting local chip production could lead to unnecessary national security threats, especially in light of the UAE’s ties with China. Although the current agreements do not encompass the TSMC plant, discussions about such projects are ongoing, with TSMC remaining tight-lipped.
Another issue of concern in the UAE is G42, a prominent AI firm in Abu Dhabi with historical connections to Huawei. Last year, the company agreed to pivot away from Huawei and other Chinese suppliers to establish a $1.5 billion collaboration with Microsoft. However, some U.S. officials are advocating for measures to ensure that G42 aligns with American priorities. The Trump administration is currently weighing a deal that would permit G42 to acquire over a million Nvidia H100 accelerators.
Critics of this arrangement include the chair of the China Select Committee, who raised issues regarding G42 in a video last year. The video features commentary from Landon Hyde, a Trump nominee in charge of establishing export rules for chips and determining the approval of specific semiconductor sales.
Insiders have noted that security requirements regarding the UAE agreement will be hashed out in a working group involving U.S. and Emirati officials. Provisions already under contract aim to prevent chips from reaching China and stopping Chinese companies from accessing facilities in the UAE. Sachs has been voicing the need to fine-tune documents, although some U.S. counterparts oppose these efforts.
During negotiations with Saudi officials, there was a proposal for U.S. chips to be integrated into facilities alongside Huawei hardware, which was swiftly rejected by the U.S. delegation. Nevertheless, Sachs suggested afterward that it might be worth considering. Some viewed this suggestion as a way to address technical national security issues, while others felt it overlooked the very reasons behind U.S. concerns.
This line of thinking is not acceptable to those who see Huawei as a firm red line in U.S. policy toward China. The current agreements do not encompass this proposal, according to reports.
“The goal of preventing diversion to a country of concern is extremely important for the U.S., but it shouldn’t be overly complex,” Sachs remarked during the Middle East summit. “The real issue is monitoring the data center to ensure the chips aren’t misused.”
