Nvidia may get a lifeline soon, depending on Trump’s UAE visit

Nvidia’s chips have become a resource the American government is jealously guarding to ensure it does not fall into the wrong hands. 

Places like the United Arab Emirates (UAE) have been struggling to get their hands on Nvidia’s chips, but that may change soon because, according to sources familiar with the matter, the US is now considering potentially easing restrictions on Nvidia Corp. sales to the United Arab Emirates.

The sources also claimed President Donald Trump could announce the start of work on a bilateral chip deal during his upcoming visit to the Gulf.

The UAE is willing to invest billions in the US in exchange for Nvidia’s chips

Nothing has been officially decided, but the debate over semiconductor trade rules for the UAE and other countries is ongoing in Washington.

Talks about modifying AI chip curbs for the UAE in particular have gradually taken center stage at both the Commerce Department and the White House, said the sources, who requested anonymity to discuss private conversations.

A step toward an eventual accord would be a win for the UAE as its AI ambitions risk being hindered by global chip rules revealed during President Joe Biden’s final week in office.

It would also give a glimpse into how Trump views AI policy for places outside of China, as his administration now has to decide on how to proceed with the AI diffusion rule, which set tiered limits on AI chip exports to the UAE and some 100 other countries.

Trump will reportedly be in the UAE on May 15, the day companies are required to start complying with the AI diffusion rule. While there, he plans to highlight the friendship between both countries as well as the fact that the UAE has made major investments in the US.

Not minding how much it has already invested, the UAE has unveiled plans to spend up to $1.4 trillion over the next decade on energy, semiconductors, AI infrastructure and manufacturing in the US.

According to the sources, that pledge and the decisive actions that have followed is what really accelerated conversations about modifying chip restrictions in the UAE.

There have been calls for a new diffusion rule that considers new global developments

The US AI chip curbs, which are designed mainly to prevent adversaries like China, Russia, Iran, and North Korea from acquiring advanced chips, are an echo from the Biden era, and as far as people like Nvidia Chief Executive Officer Jensen Huang are concerned, need to go.

In fact, Huang has urged the Trump administration to change these regulations so that American businesses can capitalize on opportunities overseas where competition with China is intensifying.

“I’m not sure what the new diffusion rule is going to be, but whatever it turns out to be, it really has to recognize that the world has changed fundamentally since the previous diffusion rule was released,” Huang said on Wednesday.

If that does not happen, and the UAE wants to remove itself from the list of countries affected by the AI chip curbs, it will have to assuage worries that chips sold to it will find their way into the wrong hands.

The UAE’s top government and industry officials like their chances with this new administration. However, it’s unclear how things will ultimately play out.

It has been reported that Trump officials have been considering making changes to the AI diffusion rule, including getting rid of the tiered system in favor of a more general global licensing requirement.

This could pave the way for individual countries, including the UAE, to negotiate their own agreements around chip access but until then the curb stays put. However nothing is certain yet and the US officials who can change that still hold conflicting views on the national security implications of the UAE’s AI push.