The United Arab Emirates (UAE) and the United States have recently signed an agreement to boost their cooperation in artificial intelligence (AI). This deal is expected to provide the UAE with expanded access to advanced AI chips from the U.S., following previous restrictions that were aimed at preventing China from obtaining such technology.

Finalized during U.S. President Donald Trump’s visit to Abu Dhabi, this agreement marks a significant achievement for the UAE as it seeks to balance its relationships with the U.S., its long-standing ally, and China, its largest trading partner. The UAE has invested billions of dollars to position itself as a leader in the global AI landscape.

According to the White House, the agreement entails the UAE’s commitment to invest in, build, or finance U.S. data centers that are at least as large and powerful as those located in the UAE. The deal also includes historic commitments from the UAE to align its national security regulations more closely with those of the United States, incorporating strong protections to prevent any diversion of U.S.-origin technology.

Reports indicate that starting in 2025, the UAE may be allowed to import up to 500,000 of Nvidia’s most advanced AI chips annually. However, neither the White House nor the Commerce Department mentioned any specific improvements in the UAE’s access to advanced chips. Nvidia has not provided a comment, and the UAE’s foreign ministry has not responded to requests for clarification.

The U.S. has long implemented protectionist policies aimed at restricting China’s access to advanced semiconductor technology. Under Trump’s administration, policies are shifting, as Trump’s AI czar, David Sacks, recently stated that the Biden administration’s export controls were not meant to target allies and strategic partners.

Mohammed Soliman, a senior fellow at the Middle East Institute, remarked that this new arrangement allows the UAE to deepen its technology partnership with the U.S. while still maintaining its trade ties with China. He emphasized that it does not signify an abandonment of China but rather a recalibration of the UAE’s tech strategy to align with U.S. standards, particularly in areas such as computing, cloud services, and chip supply chains.

Additionally, the agreement involves plans to build an AI campus in Abu Dhabi with a capacity of 5 gigawatts for AI data centers, making it the largest outside the United States. This facility will be developed by G42, an Abu Dhabi state-backed firm, in collaboration with several U.S. companies.

The U.S. is currently home to the majority of AI computing power, with China also holding a significant share. This agreement supports the UAE’s ambition to establish itself as a global AI hub. AI discussions were a priority during UAE President Sheikh Mohamed bin Zayed Al Nahyan’s visit to Washington in December 2022.

G42, alongside MGX, which has been selected to lead the UAE’s AI investment initiatives, has invested in several U.S. firms like OpenAI and Elon Musk’s xAI. Microsoft also pledged $1.5 billion to G42 last year. Despite these developments, significant Chinese companies like Huawei and Alibaba Cloud remain active in the UAE, and there have been reports of organized smuggling of AI chips to China from various countries.

The Trump administration’s decision to overturn Biden’s export controls suggests a shift towards a more open approach, aiming to foster innovation and align U.S. strategic interests with those of its allies. Russ Mould, investment director at AJ Bell, noted that the previous export controls created a tiered system that allowed varying levels of access depending on the country, and the current plan appears to aim at expanding access for countries like the UAE.