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UAE Backs US Restrictions on Semiconductors Exports To China

Daniel Kim Views  

The United Arab Emirates (U.A.E.) has supported the U.S.’s export restrictions on large-scale artificial intelligence (AI) accelerators to Middle Eastern countries. The U.A.E.’s strategy appears to enhance AI capabilities by aligning more closely with the U.S. and leveraging its oil money. This move is expected to inevitably impact NVIDIA, a leading player in the AI accelerator market.

In a recent interview with Bloomberg Television, Omar bin Sultan Al Olama, the U.A.E.’s Minister for Artificial Intelligence and Digital Economy, acknowledged the U.S.’s valid concerns about the potential transfer of advanced chip technology to China.

Al Olama mentioned the geopolitical issues the U.A.E. faces due to its strategic location. Middle Eastern countries are collaborating with the U.S. or China and entering the AI field to reduce their economies’ dependence on oil. As the Middle East emerges as a strategic hub for AI, technological influence in the region between the U.S. and China is intensifying.

In particular, the U.A.E. is investing its oil money in building AI infrastructure across all sectors, from healthcare to military weapons. Al Olama emphasized the U.A.E.’s role as a strategic ally in technological development with the U.S.

Last April, Microsoft Corporation (MS) invested $1.5 billion in the U.A.E.’s leading AI company, G42, signaling a new era of technological cooperation between the two countries. Following MS’s investment, G42 has decided to join the U.S.-led AI supremacy race and move away from its dependency on China.

MS’s investment in G42 includes an agreement to exclude Chinese equipment, such as Huawei, from its operations. This move is seen as a partnership between the U.S. and U.A.E. governments. The contract was reportedly finalized after a year of intense negotiations between the two governments.

G42 has also partnered with OpenAI, revealing the U.A.E.’s determination to strengthen its long-standing alliance with the U.S. and develop global AI. The U.A.E. actively seeks U.S. support to develop semiconductor production capabilities essential in the AI sector.

Recently, the Biden administration in the U.S. has been delaying AI accelerator export permit applications to countries like Saudi Arabia, the U.A.E., and Qatar for several weeks. This move is seen as a precaution against the possibility of semiconductor technology exported to these countries falling into the hands of Chinese companies. There are concerns that Chinese companies, blocked from importing advanced U.S. semiconductors due to U.S. sanctions, might access advanced semiconductors through data centers in the Middle East.

AI accelerators, specialized chips for AI learning and inference, are assembled from graphics processing units (GPUs) and high bandwidth memory (HBM). The U.S. government is mainly focused on the issue of companies like NVIDIA and AMD selling large quantities of AI accelerators. This is because countries like Saudi Arabia and the U.A.E. have recently imported large amounts of AI accelerators needed to build AI data centers.

With NVIDIA’s restricted AI accelerator exports to the Middle East, companies like MS, AMD, Google, and Intel Corporation have formed a cooperative organization called the Ultra Accelerator Link (UA Link) Promoters Group’ to pursue NVIDIA.

Daniel Kim
content@viewusglobal.com

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