Trump is Rewriting How the U.S. Treats AI Chip Exports—and the Stakes Are Enormous

This week, President Trump traveled to the Middle East on a business and diplomacy mission, during which he greenlit the sale of hundreds of thousands of American-made AI chips to firms in the UAE and Saudi Arabia. These deals signal a major shift in the U.S.’s approach to cutting-edge AI technology. Previously, U.S. leaders had focused on limiting access to ultra-powerful chips, especially to countries that might pose national security threats. Now, Trump is using them as leverage for his larger trade ambitions. 

While Trump was at the Saudi-U.S. Investment Forum in Riyadh—held in parallel with his visit—the White House announced that Saudi Arabia was committing $600 billion in investments in the United States, “building economic ties that will endure for generations to come,” Onstage at the conference, Nvidia CEO Jensen Huang announced his company was entering a massive partnership with Humain, a new company owned by the Saudi kingdom’s Public Investment Fund, and sending them hundreds of thousands of chips. Rival chipmaker AMD announced its own $10 billion Saudi Arabian project. Another deal in the works could send hundreds of thousands of chips to the Emirati firm G42. 

While Trump allies heralded the deal as mutually beneficial to all parties, some national security experts have concerns about the longterm impacts of spreading these chips around the world. 

“AI chips should not be bargaining chips for broader trade deals,” says Janet Egan, a senior fellow at the Center for a New American Security (CNAS). “They underpin US AI dominance, and we have to be really careful to not make short term decisions that might be beneficial for trade in the near term, but cede AI leadership in the longer term.”

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Early this year the Chinese company Deepseek revealed that it had developed a very powerful model mostly using Nvidia chips obtained before the Biden administration closed an export loophole in 2023, heightening the intensity of the race. President Biden, in his final weeks, ratcheted up export controls, including limits on countries in the Gulf.

Last week, the Trump administration ripped up those rules, with a spokesperson calling them “overly complex, bureaucratic” and saying they “would stymie American innovation.” They then switched to a new tack: linking countries’ access to AI chips with larger trade negotiations. Transitioning to a negotiation-based approach, the administration argued, could allow for more flexibility from country-to-country and allow Trump to secure key business concessions from Middle Eastern partners. 

Business and governments in the Middle East have massive ambitions for AI, aiming to position themselves at the forefront of this emerging technology. They benefit from several strategic advantages to do so, including access to boundless energy, free-flowing capital thanks to oil and sovereign wealth funds, and a lack of government restrictions—allowing them to rapidly push through massive infrastructure projects. But until now, the Middle East had lacked one crucial puzzle piece: Access to cutting-edge American chips from companies like Nvidia.

Now, the amount of chips that U.S. companies will reportedly send to the UAE and Saudi Arabia is massive: “We’re talking about something larger than any AI training system that exists in the world today,” says Alasdair Phillips-Robins, a fellow at the Carnegie Endowment for International Peace. Conceivably, the ultra-powerful models built with this training system could synthesize automated cyber-attacks, intelligence collection, and weapons development. 

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This is potentially problematic to some U.S. analysts, given Saudi Arabia and the UAE’s close ties with China. In previous years, American spy agencies issued warnings that G42 could be a conduit for siphoning advanced American technology to China. G42 denied any connections to the Chinese government or military.

“If you think about which country should be leading the future of potentially the most critical and transformative technology we’ve ever had, I would not want that to be a non-democratic authoritarian regime,” Egan says. 

On Tuesday, the House Select Committee on the Chinese Communist Party, led by Michigan Republican John Moolenaar, wrote on Twitter that the new chip deals “present a vulnerability for the CCP to exploit.” 

Sam Winter-Levy, another Carnegie Endowment fellow, worries that the deal will encourage U.S. AI companies to move to the Gulf, where they might get better deals on energy and avoid U.S. regulations and community pushback. Prominent U.S. companies have wasted no time in seizing the new opportunity presented by the Trump administration. OpenAI’s Sam Altman, Nvidia’s Jensen Huang, and AMD’s Lisa Su all attended the Saudi-U.S.Investment Forum. The AI startup Scale AI—which has a partnership with the U.S. government to develop AI safety standards—announced its intentions to open an office in Saudi Arabia. Google, too, advanced an AI hub in the country. 

“You could end up in a position where some large proportion of U.S. computing power has been offshored to a bunch of states that can wield leverage over U.S. foreign policy to shape it in ways that may not align with US national interests,” says Winter-Levy,. 

Winter-Levy also contends that these AI chip deals go against Trump’s past emphasis on an “America first” foreign policy approach. “This is offshoring data centers that could be built in the United States. This is offshoring chips that could be going to US tech companies,” he says. “It’s hard to reconcile this with an America First approach to industrial policy or economic policy in general.”