Trump's UAE AI megadeal challenges China's tech ambitions

Trump greenlit UAE's massive AI campus with 500,000 Nvidia chips annually, bypassing previous China concerns. The deal signals major shift in US tech export strategy while requiring American management of the facilities.

After years of being denied advanced American AI technology under the Biden administration, the United Arab Emirates has scored a major victory. Last week, US President Donald Trump authorized the Gulf state to build the largest artificial intelligence campus outside the US borders, complete with access to approximately 500,000 of Nvidia's cutting-edge AI chips annually starting this year.

The deal, signed during Trump's Middle East visit last week, marks a dramatic shift in US export policy toward nations with strong Chinese ties. While the UAE has been investing billions to position itself as a global AI powerhouse, its close economic relationship with Beijing—its largest trading partner—had previously triggered Washington's national security concerns.

"Biden's export controls were never intended to capture friends, allies, strategic partners," declared Trump's AI czar David Sacks during a related event in Riyadh, signaling the new administration's willingness to distinguish between adversaries and strategic allies regardless of their Chinese connections.

Strategic balancing act

For Abu Dhabi, this agreement resolves a longstanding dilemma of trying to maintain productive relationships with both Washington and Beijing. "This shift enables the UAE to deepen its technology partnership with the US while still preserving trade ties with China," explained Mohammed Soliman, senior fellow at the Middle East Institute.

"It doesn't mean abandoning China but recalibrating tech strategy to align with US standards where it matters most: compute, cloud, and chip supply chains."

Campus specifics and security measures

The 25.9 square kilometer Abu Dhabi AI campus will feature data centers with a staggering five gigawatts of power capacity. Rand Corporation analyst Lennart Heim calculates this is sufficient to support approximately 2.5 million of Nvidia's top-line B200 chips, making it substantially larger than any other AI infrastructure project outside America.

Despite construction being handled by state-backed G42, US Commerce Secretary Howard Lutnick emphasized that "American companies will operate the data centers and offer American-managed cloud services throughout the region"—a key security provision designed to prevent technology leakage.

Leading American tech firms have already begun positioning themselves to capitalize on this new market opening. Qualcomm will develop an AI-related engineering center in the region, while Amazon Web Services will collaborate with local partners on cybersecurity initiatives.

Industry leaders like OpenAI's Sam Altman and Nvidia's Jensen Huang, both spotted with Trump during the Abu Dhabi visit, appear to endorse this shift toward controlled technology sharing with key allies.

Lingering concerns

Security experts remain wary. Despite G42 previously removing some Chinese hardware and divesting Chinese investments under US pressure, major firms like Huawei and Alibaba Cloud maintain significant UAE operations. Intelligence sources based on various reports identified UAE as one of several hubs for organized AI chip smuggling to China as recently as February this year.

As Trump's administration continues relaxing tech export restrictions for strategic partners, this deal may represent just the first step in a broader realignment of global AI power dynamics—one that allows American companies to expand globally while attempting to contain Chinese technological advancement through carefully managed alliances.