The Trump administration just flipped the script on AI chip exports, approving sales of 35,000 advanced Nvidia chips worth $1 billion to Saudi Arabia's HUMAIN and UAE's G42. This marks a dramatic reversal from Biden's restrictive policies, coming just days after Crown Prince Mohammed bin Salman pledged $1 trillion in U.S. investments during his Washington visit.
The geopolitical chess game around AI just took a major turn. The U.S. Commerce Department's approval of advanced Nvidia chip sales to Gulf states represents more than just a policy shift - it's a complete strategic pivot that could reshape the global AI landscape. Just weeks after Biden's administration tightened export controls to keep American AI technology out of Chinese hands, Trump is betting big on Gulf partnerships to maintain U.S. technological supremacy. The timing couldn't be more telling. Crown Prince Mohammed bin Salman's victory lap through Washington this week secured not just chip approvals, but a web of strategic partnerships that position Saudi Arabia as a major AI hub. His $1 trillion investment pledge - up from the original $600billion commitment - came with immediate results. Saudi's HUMAIN signed deals with Adobe, Qualcomm, AMD, Cisco, and crucially, Elon Musk's xAI for a massive 500-megawatt data center project. 'What we want to do in 2026 is to build the capacity equivalent to what Saudi has built in the last 20 years, in one year,' HUMAIN CEO Tareq Amin declared at the investment summit. That's an audacious timeline that requires serious hardware - exactly what these chip approvals deliver. The UAE's G42 isn't just along for the ride. The company has methodically addressed U.S. security concerns, replacing its Chinese-developed AI infrastructure, cutting ties with Chinese personnel, and divesting from Chinese tech holdings. 'We have what we've designed as a gold standard called the regulated technology environment,' G42's Talal Al Kaissi told CNBC, describing the security framework that convinced Commerce Department officials. But this isn't just about chips flowing south. Microsoft secured its own export license for UAE operations just two weeks ago, working closely with G42 to build regional compute infrastructure. The company's partnership with G42 was notably absent from initial announcements - until today's broader approval cleared the regulatory fog. The strategic calculus here is fascinating. 'The Trump administration's approach to the race for AI leadership against China is markedly different to that of the Biden administration,' notes Hasan Alhasan from the International Institute for Strategic Studies. Instead of restricting technology flows, Trump is expanding them to trusted partners who can serve as regional AI powerhouses. The numbers tell the story. These Gulf partners 'have the capital to invest, the relationships with Nvidia and the U.S. government,' according to North of South Capital's Kamil Dimmich. They're not just buying chips - they're building the infrastructure to become 'a global hub for compute.' That infrastructure play is crucial. HUMAIN aims to make Saudi Arabia the world's third-largest AI hub behind the U.S. and China. With nearly $1 trillion from the Public Investment Fund backing these ambitions, and now access to cutting-edge American hardware, that goal looks increasingly achievable. The regulatory framework remains strict. Both companies must comply with 'rigorous security and reporting requirements' overseen by Commerce's Bureau of Industry and Security. Physical security protocols prevent technology diversion, while reporting mechanisms ensure compliance with U.S. strategic interests. Critics worry about technology leakage, but supporters argue these partnerships are essential for maintaining American AI leadership. By enabling trusted allies to build world-class AI infrastructure using American technology, the U.S. creates a network of dependent partners rather than forcing them toward Chinese alternatives. The broader implications extend beyond chips and data centers. This approval signals Trump's willingness to weaponize technology partnerships for geopolitical advantage, using America's AI dominance as diplomatic leverage while creating economic dependencies that serve U.S. strategic interests.
