US Greenlights Export of Cutting-Edge AI Chips to Saudi and UAE Firms

WASHINGTON (Reuters) - In a significant boost to Gulf tech ambitions, the U.S. Commerce Department announced on Wednesday that it has approved the export of advanced artificial intelligence semiconductors - equivalent to up to 35,000 Nvidia Blackwell chips - to two key players in Saudi Arabia and the United Arab Emirates. The move targets Humain, a Saudi government-backed AI venture, and G42, a state-linked tech firm in Abu Dhabi, amid growing U.S. efforts to deepen technological ties with the region while navigating global competition in AI.

This authorization comes on the heels of Humain's earlier declaration to procure 600,000 Nvidia AI chips, signaling a massive investment in Saudi Arabia's digital infrastructure. The chips will fuel ambitious data center projects, including a joint venture between Humain and Elon Musk's xAI to construct a 500-megawatt facility in the kingdom. Such initiatives are poised to position Saudi Arabia as a burgeoning hub for AI innovation, leveraging vast energy resources to power energy-intensive computing demands.

On the UAE front, G42 is spearheading the development of one of the world's largest data center networks, dubbed Stargate UAE, in collaboration with U.S. heavyweights like Nvidia, OpenAI, Cisco, and Oracle, alongside Japan's SoftBank. The first phase of this project is slated to launch in 2026, enhancing the emirates' role in global AI supply chains and fostering advancements in sectors from healthcare to energy optimization.

The timing of the announcement is particularly noteworthy, aligning with Saudi Crown Prince Mohammed bin Salman's first U.S. visit since 2018. During a high-profile U.S.-Saudi Investment Forum in Washington, D.C., the crown prince joined U.S. President Donald Trump and Nvidia CEO Jensen Huang for discussions that underscored a renewed era of bilateral cooperation. UAE officials celebrated the decision as "another milestone" in their strategic partnership with Washington, emphasizing mutual trust in advanced tech and national security matters.

This export approval reflects the U.S.'s strategic pivot to ally with Gulf nations in the AI race, potentially countering influences from rivals like China. However, it also raises questions about export controls and data security, as these chips could accelerate regional AI capabilities exponentially. As the deals materialize, they promise to inject billions into the semiconductor ecosystem while bolstering economic diversification in the oil-dependent Gulf.