UAE AI Deal with Nvidia Chips Temporarily Paused: Latest Report Reveals Delay in UAE’s Purchase

The prospective Artificial Intelligence (AI) agreement between the United States and the United Arab Emirates (UAE) has reportedly been temporarily suspended, pending finalization, due to national security concerns. According to unnamed sources cited by the Wall Street Journal, apprehensions arise from potential risks that AI chips destined for the UAE might inadvertently find their way to China.

The agreement, which would authorize the UAE’s acquisition of billions of dollars’ worth of AI chips from companies such as Nvidia and other semiconductor providers, has raised concerns due to initial fears about potential chip smuggling. However, officials from both the UAE and Saudi Arabia have assured their American counterparts that adequate safeguards are in place to prevent such an occurrence.

Recent months have seen a heightened focus on preventing chip exports to China, given escalating concerns over potential smuggling. It has been speculated that the Trump administration may impose export restrictions on Thailand and Malaysia as part of its effort to curb potential smuggling activities. In response, Malaysia implemented an export permit requirement for U.S. AI chips as of Monday.