Trump’s UAE AI Chip Export, Mega Data Center Deal Announcements Spurs Security Controls

The US and UAE have commenced discussions of allowing Abu Dhabi to acquire some of the most advanced semiconductors manufactured by American chip makers, CNBC reported. US President Donald Trump announced the UAE AI chips deal at the Emirati Capital on May 16 during the US-UAE Business Council meeting at the close of his 4-day Middle East visit.

“Yesterday the two countries also agreed to create a path for the UAE to buy some of the world’s most advanced AI semiconductors from American companies, it’s a very big contract,” Trump said.

A Win for Nvidia

The preliminary chip deal forged by the Trump administration in the UAE has been considered a win for Nvidia. The deal will see the US AI chip manufacturer export 500,000 units of its most advanced chips, H100 to the Arab country each year to boost its capacity to set up data centers required to power AI models. Although the deal runs through to 2027, it may remain in place until 2030.

Through the deal, 20% of the chips will be used by UAE-based tech company G42 while the other chips will be divided among US companies that include Oracle and Microsoft. In recent years, the UAE has invested in AI infrastructure with the aim of positioning itself as a global tech hub. US-made semiconductors are at the heart of this goal, which was previously blocked by Washington’s national security concerns.

“By extending the world’s leading American tech stack to an important strategic partner in the region, this agreement is a major milestone in achieving President Trump’s vision for US AI dominance,” US Commerce Secretary Howard Lutnick said.

UAE’s Mega Data Center

The US and the UAE also agreed to partner in the construction of a mega data center in Abu Dhabi to advance AI capabilities in the region. The Abu Dhabi AI data center will have a 5-gigawatts capacity, which is sufficient to power a large city.

The data center will be constructed by tech firm G42 in partnership with various US companies whose names were not disclosed. The UAE G42 data center project will be implemented in phases, starting with a 1-gigawatt AI data center that will eventually expand to cover 10 square miles. According to the Commerce Department, the UAE data center will be the largest deployment made outside the US.

​​“In the UAE, American companies will operate the data centers and offer American-managed cloud services throughout the region. The agreement also contains strong security guarantees to prevent diversion of U.S. technology,” Lutnik added.

The UAE wants to lead in the global AI race by 2031. The country views AI infrastructural investment as critical to securing its post-oil future. Prior to Trump’s Gulf visit, the Minister of Education in the Emirates had said the country plans to diversify its economy, particularly in AI and technology.

On May 15, White House announced that the UAE is committed to financing development of large, powerful data centers in the US as well. UAE President Sheikh Mohamed bin Zayed Al Nahyan said the partnership strengthens the region’s position as the hub for sustainable development and cutting-edge research.

Security Concerns

As Trump rescinds the AI chip export rule introduced by the Biden administration, this could be a thing of the past. The AI diffusion rule imposed strict export controls that restricted exportation of advanced AI chips to different countries, including US allies.

The decision to reverse AI chip export restrictions has not been received positively by lawmakers, security professionals, and some people in the current administration. Representatives of these groups have raised concerns that the move could create loopholes for American technology to find its way in the hands of rivals such as China.