The U.S. has approved the sale of Nvidia’s chips to Saudi Arabia’s Humain, and UAE’s G42, in a move that authorizes the state-backed firms to buy up to 35,000 chips, worth an estimated $1 billion.
This is a reversal for the U.S., which had previously been opposed to the idea of direct exports to state-backed AI companies in the Gulf. Export controls were put in place to avoid advanced American technology from reaching China via Gulf countries.
The U.S. Commerce Department said in a statement that President Donald Trump is now moving to expand the reach of such advanced technology in order to “promote continued American AI dominance and global technological leadership.” Former President Joe Biden had imposed a final round of export restrictions before leaving office, in order to ensure technology does not reach China.
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The U.S. Commerce Department approved the chip exports, with the condition the state-backed AI outfits agree to “rigorous security and reporting requirements,” overseen by the Department of Commerce’s Bureau of Industry and Security.
This comes after Saudi Crown Prince Mohammed bin Salman’s trip to Washington this week, when the Kingdom pledged to spend $1 trillion in the U.S., up from $600 billion originally committed during Trump’s Gulf tour in May.
“Even if we don’t get to that, both sides have skin in the game,” Afshin Molavi, senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies, told CNBC’s Dan Murphy.
Kamil Dimmich, partner and portfolio manager at North of South Capital said that 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.”
G42 and HUMAIN are “able to use this to build out regional infrastructure, and they want to leverage that infrastructure to become a global hub for compute,” Dimmich added.
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Humain is teaming up with AMD and Cisco to build data centers in the Middle East. CEOs of the two companies told Reuters on Tuesday that the joint venture has already landed its first customer. According to Humain CEO Tareq Amin, the joint venture will kick off with a 100-megawatt (MW) data center project in Saudi Arabia. The computing capacity of the data center will be supplied by generative video startup Luma AI, contracted by Humain.
Humain will also be partnering with Elon Musk’s xAI to build a 500 MW data center in Saudi Arabia.
Just two weeks ago, Microsoft secured an export license for advanced chips to the UAE. Microsoft’s key partner in the UAE is G42, but the local AI company was notably absent from the Microsoft announcement, until today.