According to a Reuters report released on Thursday, the United States is said to be nearing the completion of an innovative agreement to export 500,000 advanced AI chips annually from Nvidia (NASDAQ: NVDA) to the United Arab Emirates.

Deal Timeline and Allocation Structure

The strategic agreement is anticipated to last until 2027, possibly extending it to 2030. According to the suggested arrangement:

  • About 20% of the chips, nearly 100,000 units, will be designated for G42, an AI company based in the UAE.
  • The leftover 400,000 chips will be allocated to U.S. firms with major AI activities, such as Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL).
  • Microsoft and Oracle might also invest money in new UAE data centers to bolster their regional AI projects.

Infrastructure Matching and Security Measures

To ensure a balance between foreign investment and domestic development:

  • G42 must pair every UAE facility with an equivalent data center located in the United States.
  • A collaborative task force will be created to:
  • Specify what constitutes an “advanced AI chip.”
  • Establish security criteria and compliance benchmarks.

This dual approach aims to promote AI growth abroad while maintaining U.S. technological sovereignty.

What Chips Are Included?

The chips are expected to include:

  • Nvidia’s Blackwell graphics processing units, the firm’s newest high-performance AI chips
  • Potentially, the forthcoming Rubin series, expected to exceed the Hopper generation in processing capability. 

Bloomberg News reports that G42 may obtain computing power equivalent to 1 million to 1.5 million Nvidia H100 chips throughout the duration of the contract. That amount is almost four times the threshold established by the Biden administration’s AI export restrictions, which is currently said to be under review. 

Geopolitical and Industry Implications

This potential deal underscores:

  • The increasing importance of AI in global power dynamics
  • The strategic effort of the United States is to balance collaboration with security oversight.
  • The UAE is strengthening its position as a center for technology and AI progress in the Middle East.

If this agreement is completed, it could transform technology collaborations between the United States and the Gulf, enhance global AI infrastructure, and reinforce Nvidia’s dominance in the AI chip industry. It also highlights how access to advanced computational skills now influences geopolitical alliances more than just oil or weapons.