U.S. Approves Historic Sale of 70,000 AI Chips to UAE and Saudi Arabia

The United States Commerce Department plans to approve the sale of up to 70,000 advanced artificial intelligence chips to companies in the United Arab Emirates and Saudi Arabia, according to a Wall Street Journal report Wednesday. The landmark decision represents a significant shift in U.S. policy toward technology exports to the Gulf region as nations worldwide race to build sovereign AI capabilities.

The approval would mark one of the largest transfers of advanced AI computing power to the Middle East and signals evolving American strategy around technology exports to allied nations. Both the UAE and Saudi Arabia have invested billions in establishing themselves as regional AI hubs, viewing artificial intelligence as central to their economic diversification efforts away from oil dependence.

Strategic Shift in U.S. Export Policy

The decision to approve such a substantial chip sale represents a notable evolution in American export control policy. The U.S. has maintained strict controls on advanced semiconductor exports, particularly following the 2022 restrictions targeting China's access to cutting-edge AI chips. The Commerce Department's apparent willingness to approve 70,000 units for Gulf nations suggests differentiated policy approaches based on geopolitical relationships.

Advanced AI chips—likely including Nvidia's H100 or similar high-performance GPUs—have become strategic assets in the global competition for AI supremacy. The U.S. government has sought to maintain American technological leadership while supporting allies' AI development, creating a complex balancing act between commercial interests and national security concerns.

UAE and Saudi AI Ambitions

The United Arab Emirates has emerged as the Gulf region's most aggressive player in artificial intelligence. The nation launched its National Artificial Intelligence Strategy in 2019, aiming to become a global AI leader by 2031. MGX, a new UAE sovereign wealth vehicle focused on AI investments, has deployed billions in partnerships with major American technology companies including OpenAI and Microsoft.

Saudi Arabia's approval for advanced AI chips aligns with Crown Prince Mohammed bin Salman's Vision 2030 initiative to transform the kingdom's economy. The nation has committed over $100 billion to technology investments as part of its diversification strategy, with artificial intelligence featuring prominently through initiatives like the Saudi Data and AI Authority.

Access to 70,000 advanced AI chips would enable both nations to reduce dependence on foreign cloud providers for AI compute, a strategic priority for countries seeking technological sovereignty. The chips could support domestic AI model development, reducing reliance on Western AI systems for sensitive government and commercial applications.

Geopolitical and Commercial Implications

The approval must be understood within the broader context of U.S.-China technological competition. As Washington restricts Beijing's access to advanced chips, alternative markets become increasingly important for American semiconductor companies. The Gulf states represent friendly nations with substantial purchasing power and strategic value.

For American semiconductor companies, particularly Nvidia, the approval represents significant revenue opportunities. At estimated prices of $25,000-40,000 per advanced AI chip, 70,000 units could generate $1.75-2.8 billion in sales. With U.S. restrictions limiting sales to China, Gulf nations represent crucial alternative buyers for cutting-edge technology.

The decision also highlights the growing role of semiconductor diplomacy in international relations. As advanced chips become scarce and strategically valuable, their allocation increasingly reflects geopolitical considerations alongside commercial factors. Other nations including India, Israel, and various European countries may view the Gulf approvals as precedent for their own substantial chip purchase requests.