In a significant policy shift, the United States announced plans on May 13, 2025, to ease restrictions on the export of advanced artificial intelligence (AI) chips to trusted allies, including Saudi Arabia and the United Arab Emirates (UAE). This move aims to strengthen AI-related collaborations and counter China's growing influence in global technology markets.

The decision involves rescinding the "diffusion rule," a regulation implemented during the Biden administration to limit the distribution of U.S. AI technologies and prevent their use by adversarial nations. David Sacks, the White House's AI and cryptocurrency official, announced the policy change in Riyadh, stating that the rule was never intended to target strategic partners. He emphasized that curtailing chip exports is not necessary to manage national security risks.

This policy reversal aligns with the current administration's emphasis on minimal regulation of AI and digital assets to foster innovation. Industry stakeholders have argued that excessive restrictions could drive countries to seek technology from China, thereby undermining U.S. influence in global tech markets.

During a visit to Saudi Arabia, President Donald Trump announced over $600 billion in U.S.-Saudi investment deals, including a collaboration between Nvidia and Saudi-backed AI firm Humain to establish AI facilities powered by U.S. chips. This move reverses the previous administration's restrictions that had limited access to advanced American AI microchips in the Middle East. In a related shift, the Department of Commerce also rescinded previously implemented chip export rules and declared that using Huawei’s Ascend chips globally now violates U.S. export controls. Trump’s policy aims to strengthen alliances and suppress demand for Chinese technology by offering U.S. alternatives, contrasting with the previous strategy of limiting technological diffusion. The approach is designed to ensure that allies like Saudi Arabia rely on U.S. suppliers rather than Chinese firms, thereby indirectly undermining China's technological advancement.

Nvidia has announced a strategic partnership with Humain, an AI startup owned by Saudi Arabia's sovereign wealth fund, to support the Kingdom's growing artificial intelligence and cloud computing sectors. Under this collaboration, Nvidia will supply 18,000 of its advanced GB300 Blackwell AI chips to Saudi Arabia for use in a 500-megawatt data center project. This initiative was unveiled during a White House-led tour through the Middle East, aiming to foster technological partnerships. Nvidia’s CEO, Jensen Huang, emphasized the importance of AI as critical national infrastructure, likening it to electricity and the internet. The approach aligns with Saudi Arabia's broader vision to bolster its AI capabilities with the assistance of foreign investments. The GB300 Blackwell chips being delivered are among Nvidia’s latest and most powerful offerings, having been introduced earlier in 2025.

The Trump administration is also considering a significant deal to allow the United Arab Emirates (UAE) to import over a million advanced Nvidia AI chips. The proposed agreement would permit the UAE to receive 500,000 high-end chips annually through 2027, exceeding previous regulations on AI chip exports. Approximately 20% of these chips would go to Abu Dhabi’s state-backed AI firm G42, with the remainder intended for U.S. companies establishing data centers in the region—potentially including OpenAI. The deal aligns with broader U.S.-Middle East economic engagements, including a recent $600 billion investment pledge from Saudi Arabia to the U.S.

The easing of AI chip export restrictions to trusted allies like Saudi Arabia and the UAE is expected to have several social and economic implications:

• Strengthening Alliances: By providing advanced AI technologies to Middle Eastern allies, the U.S. aims to reinforce diplomatic and economic ties, fostering collaboration in emerging technologies.

• Economic Growth: Access to advanced AI chips will enable countries like Saudi Arabia and the UAE to accelerate their AI initiatives, potentially leading to economic diversification and growth in sectors such as technology, healthcare, and defense.

• Market Dynamics: For U.S. companies like Nvidia, these policy changes open up new markets and revenue streams, as evidenced by the recent surge in Nvidia's stock price following the announcements.

• Geopolitical Considerations: While the policy shift aims to counter China's influence by offering U.S. technology alternatives, it also raises concerns about the potential for advanced technologies to be accessed by unintended parties, necessitating robust safeguards and monitoring.

The U.S. decision to ease AI chip export restrictions to Middle Eastern allies represents a strategic effort to strengthen alliances, foster economic growth, and counter China's technological influence. As these partnerships develop, careful monitoring and regulation will be essential to balance innovation with national security interests.