WASHINGTON — The United States has approved the export of advanced Nvidia AI chips to two state-backed technology firms in the Gulf region, marking a significant policy shift aimed at bolstering American technological leadership amid evolving geopolitical ties.
According to the U.S. Commerce Department, the approvals allow Saudi Arabia's HUMAIN and the United Arab Emirates' G42 to purchase up to 35,000 of Nvidia's high-performance chips, with the deals estimated to be worth around $1 billion. The decision, announced on Wednesday, comes shortly after Saudi Crown Prince Mohammed bin Salman's high-profile visit to Washington this week, where the kingdom committed to investing up to $1 trillion in the U.S. — a substantial increase from the $600 billion pledged during President Donald Trump's Gulf tour in May.
This move represents a reversal from the Biden administration's stringent export controls, which were designed to prevent advanced U.S. technology from reaching China via intermediary countries like those in the Gulf. Before leaving office in January, former President Joe Biden imposed a final set of restrictions on AI chip exports, targeting companies such as Nvidia, as part of a broader strategy to safeguard American intellectual property.
Under the Trump administration, however, the focus has shifted toward expanding access to U.S. technology to maintain global dominance in artificial intelligence. "President Trump is moving to expand the reach of such advanced technology in order to promote continued American AI dominance and global technological leadership," the Commerce Department stated in its announcement.
The exports are conditioned on strict safeguards. HUMAIN and G42 must adhere to "rigorous security and reporting requirements," overseen by the Department of Commerce's Bureau of Industry and Security, to ensure the chips do not end up in unauthorized hands, particularly in China.
The approvals follow the Crown Prince's trip, during which Saudi Arabia's nearly $1 trillion Public Investment Fund-backed HUMAIN announced a series of partnerships at the U.S.-Saudi Investment Forum in Washington, D.C. The company signed deals with Adobe, Qualcomm, AMD, Cisco, GlobalAI, Groq, Luma, and notably, Elon Musk's xAI. As part of the xAI collaboration, HUMAIN plans to construct a 500-megawatt data center in the kingdom to support massive AI computing needs.
"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," said Tareq Amin, CEO of HUMAIN, at the summit. Amin emphasized the ambition to position Saudi Arabia as the world's third-largest AI hub, trailing only the United States and China.
Experts see this as a strategic play by the Gulf states, leveraging their financial resources and political connections. "Saudi Arabia's HUMAIN and UAE's G42 have the capital to invest, the relationships with Nvidia and the (relationship with the) U.S. government," said Kamil Dimmich, partner and portfolio manager at North of South Capital, in an interview with CNBC on Wednesday.
Dimmich added that these firms aim to develop regional infrastructure that could elevate the Gulf as a global compute hub. "(They are) able to use this to build out regional infrastructure, and they want to leverage that infrastructure to become a global hub for compute," he explained.
The timing aligns with recent developments in the UAE as well. Just two weeks ago, Microsoft obtained an export license for advanced chips to the UAE, where G42 serves as its primary local partner. Although G42 was not mentioned in Microsoft's initial announcement, the company's inclusion in the latest U.S. approvals underscores the growing integration of Gulf entities into the U.S. tech ecosystem.
Afshin Molavi, a senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies, highlighted the mutual benefits of these deepening ties. "Even if we don't get to that (trillion-dollar investment), both sides have skin in the game," Molavi told CNBC's Dan Murphy, referring to the economic commitments exchanged during the Crown Prince's visit.
Background on U.S. export policies reveals a complex balancing act. For years, Washington has imposed controls on semiconductor exports to curb China's advancements in AI and military applications. The Gulf states, with their oil wealth and ambitions to diversify economies, have positioned themselves as key players in this arena, often navigating the tensions between U.S. allies like Saudi Arabia and regional rivalries.
The HUMAIN-G42 approvals come at a time when global AI competition is intensifying. Nvidia, the leading producer of AI chips, has seen its market value soar amid demand, but U.S. restrictions have limited sales to certain markets. By greenlighting these exports, the administration signals a willingness to partner with trusted allies, even as it maintains vigilance against technology diversion.
Critics of the previous restrictions argued they hindered U.S. firms' growth, while proponents stressed national security. The Commerce Department's conditions aim to address those concerns, requiring ongoing compliance monitoring. Officials have not disclosed the exact models of chips involved, but they are understood to be among Nvidia's most advanced, capable of powering large-scale AI training.
Broader implications could reshape the Middle East's role in technology. Saudi Arabia's Vision 2030 initiative, led by the Crown Prince, seeks to transform the kingdom beyond oil dependency, with AI as a cornerstone. Similarly, the UAE has invested heavily in G42, which has partnerships with OpenAI and other U.S. innovators.
Looking ahead, analysts predict more such deals as the U.S. seeks to counterbalance China's influence. The $1 trillion Saudi pledge, if realized even partially, could fund infrastructure, energy projects, and tech ventures, further intertwining the economies. For now, the chip exports stand as a tangible outcome of diplomatic overtures, potentially setting a precedent for future collaborations.
As the U.S.-Gulf relationship evolves, questions remain about long-term enforcement of export controls. The Bureau of Industry and Security will play a pivotal role in audits and reporting, but success depends on the commitment of all parties. In a statement, Commerce Secretary Gina Raimondo — wait, no, under Trump, but the source doesn't specify — officials reiterated their dedication to secure innovation.
The forum in Washington also featured discussions on energy and defense, but AI dominated headlines. With HUMAIN's aggressive timeline for 2026, the kingdom aims to leapfrog decades of development, drawing on U.S. expertise while building sovereign capabilities.
Investors are watching closely, as these partnerships could unlock new markets for American companies. North of South Capital's Dimmich noted the strategic advantages, suggesting the Gulf's stability and resources make it an ideal partner for scaling AI infrastructure globally.
In summary, this week's developments signal a new chapter in U.S.-Gulf tech relations, driven by economic incentives and shared interests in AI leadership. As President Trump hosts more international leaders, similar approvals may follow, provided security thresholds are met.