Trump lifts the ban on chip exports to the UAE, despite the risk from China

One of the world’s most powerful data centres is set to be built in the United Arab Emirates, capable of housing 2.5 million AI processors when fully operational, and destined to be the largest ever built outside the United States. And it will be G42, the Emirati AI giant chaired by National Security Adviser Tahnoon bin Zayed – brother of President Mohamed bin Zayed – that is behind this project; until two years ago, the company’s data centres were filled with Chinese technology. This has been made possible by the decision taken last Friday by the US Department of Commerce to authorise G42 to purchase the most advanced American chips without having to apply for a licence for each supply and without a publicly stated quantity limit. The exemption, which explicitly recognises the UAE’s role in the conflict with Iran, also applies to “UAE government agencies, from the armed forces to the Ministry of Defence”, as confirmed by the text of the regulation, as well as to eight US companies operating in the country – from Microsoft to OpenAI.

Democratic Senator Elizabeth Warren described the decision as “corrupt”: four days before President Donald Trump’s inauguration, entities linked to G42 chairman Tahnoon bin Zayed had purchased 49 per cent of World Liberty Financial, the Trump family’s cryptocurrency company, whose token subsequently plummeted by 90 per cent. Meanwhile, a June Senate report drafted by Democratic staff criticised the links between the White House and the UAE, highlighting the number of decisions that have been taken in Abu Dhabi’s favour since that day.

Obviously, the rationale behind the decision has to do with China. In fact, until two years ago, G42 was building its data centres using Huawei equipment, whilst its investment arm, 42XFund, held around $100 million worth of shares in ByteDance, TikTok’s Chinese parent company. However, the best AI technology is still dominated by the US, and to gain access to it, from 2024 onwards, G42 began ‘dismantling’ its Chinese hardware and selling off its holdings in China; also in 2024, Microsoft invested around $1.5 billion in the AI company, acquiring a stake in the business and a seat on the board of directors. However, last October, the Financial Times revealed that, according to a 2022 US intelligence assessment, G42 had transferred technology to Huawei which was subsequently used to improve the Chinese PL-15 and PL-17 missiles. G42 has dismissed this allegation as “false and defamatory”, despite the Biden administration having considered adding G42 to the “Entity List”.

The Trump administration, however, has opted for a different path – or rather, a motorway: in the case of G42, the authorisation is set to expire automatically after 270 days, at the start of April 2027, unless the company has ‘become an American company’ in the meantime. As early as November 2025, Washington had authorised 35,000 Nvidia GB300 Blackwell Ultra chips – at the time the flagship model for training the most advanced AI systems and models – which remain off-limits to China, which can only purchase, subject to a licence, the much less powerful previous-generation H200 chips. But in Abu Dhabi, thanks to G42, the largest computing complex outside the US is already under construction: 5 GW of computing power across an area of 10 square miles. When the entire campus is complete, it will be able to house millions of processors.

“This exacerbates the already severe chip shortage and slows down US AI development,” wrote Chris McGuire of the Council on Foreign Relations on X, who led the White House’s chip export control policy under Biden. ‘The UAE will become one of the world’s most important computing hubs, the first real competitor to the United States and its hyperscalers, and also a back door for China.’ And this is one of the main fears: that the new centre will become an indirect channel of access for Beijing: a Chinese client no longer needs to import the latest-generation chips if it can lease computing power from the future Emirati data centre. In fact, the processors over which the Emirates now have free rein are the very same ones that the rest of the world is vying for in the AI race – the Taiwanese manufacturer TSMC recently warned that there is no immediate solution to the shortage – and the regulations do not prevent a foreign client from renting the UAE’s computing power remotely. Washington’s control does not disappear, let’s be clear, but it shifts from prior authorisations and licences to user and on-the-ground checks, carried out by officials stationed in the Emirates by the US Department of Commerce.