US delays AI chip exports to Middle East by Nvidia, AMD over concerns China could access tech through data centers

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U.S. officials have slowed the pace of issuing licenses to chipmakers such as Nvidia and Advanced Micro Devices to ship large-scale artificial intelligence (AI) accelerators to the Middle East, according to people familiar with the matter. Review national security. AI development in the region.

It is unclear how long the review will take, nor is there a concrete definition of what constitutes a large shipment, said the people, who asked not to be identified because the discussions are private.

Officials are particularly focused on high-volume sales, as countries including the United Arab Emirates (UAE) and Saudi Arabia look to import large quantities of chips used in AI data centers, the people said.

AI accelerators – a category offered by Nvidia – help data centers process the flood of information needed to develop AI chatbots and other tools. They have become essential tools for companies and governments looking to build AI infrastructure.

In October, the Commerce Department added much of the Middle East to export restrictions that originally targeted China and a handful of other foreign adversaries. This meant that companies needed special licenses from the US government to ship advanced semiconductors and chip-making tools to countries such as Saudi Arabia and the United Arab Emirates.

Some said U.S. officials have delayed or not responded in the past several weeks to license applications submitted under the rule. This includes efforts to sell to customers in the United Arab Emirates, Saudi Arabia and Qatar, according to one of the people.

Besides Nvidia and AMD, Intel and start-up Cerebras Systems also make accelerator chips. Four companies declined to comment.

The goal, according to the people, is to give Washington time to develop a comprehensive strategy for how advanced chips will be deployed overseas. Some said it also involves negotiating who manages and protects the facilities used to train AI models.

Shares of Nvidia fell for the day after Bloomberg reported the license reviews. At the close in New York, the stock fell 3.8 percent to US$1,105. AMD, meanwhile, pared earlier gains. It was up less than 1 percent at US$166.75.

In a statement, the Commerce Department said its top priority is “protecting national security.”

“With respect to advanced technologies, we conduct extensive due diligence through an interagency process, carefully reviewing license applications from applicants who use these advanced technologies,” said a department representative. plans to ship worldwide,” said a department representative.

“As always, we are committed to working with our partners in the Middle East and around the world to protect our technological ecosystem.”

Nvidia headquarters in Silicon Valley. Photo: DPA

Thea Candler, who leads the export administration at the Commerce Department, visited the United Arab Emirates, Saudi Arabia, Qatar and Kuwait earlier this month as part of those ongoing discussions. In the United Arab Emirates, it indicated there has been progress in cooperation on semiconductor export controls, another person familiar with the matter said.

Part of the concern is that Chinese companies, themselves cut off from the latest American technology, could access these chips through data centers in the Middle East. The Biden administration has been waging an extensive campaign to keep advanced semiconductors and manufacturing equipment out of China's hands, fearing the technology could be used to bolster its military.

The UAE and Saudi Arabia are jockeying for regional leadership in AI, aiming to reduce their economies' dependence on oil. Both countries see the U.S. as a key partner in the effort, and top officials and companies have said they will comply with U.S. requests to keep Chinese supply chains separate — or divest from Chinese technology altogether. will

Meanwhile, Saudi Arabia has just signed a deal. China's Lenovo Group In which the computer manufacturing company is building a research and development center in Riyadh.
A large part of the negotiations surrounding the ability to secure an export license. Microsoft's $1.5 billion investment in Abu Dhabi AI firm G42 – a partnership that followed months of negotiations with US officials.
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