Trump announces very big contract for UAE to buy AI chips on last leg of Gulf trip

US President Donald Trump capped his whirlwind tour of the Gulf by announcing $200bn in deals with the United Arab Emirates and "a very big contract" for the Gulf state to buy advanced Artificial Intelligence chips.  

The list of deals with the UAE includes the type of traditional commercial agreements the US often signs with Gulf rulers, according to the White House.

The UAE’s Etihad Airways committed to buy $14.5bn worth of Boeing 787 and 777x aircraft with General Electric engines. ExxonMobile, Occidental Petroleum and EOG Resources said they would partner with Abu Dhabi National Oil Company to expand oil and natural gas production in a deal valued at $60bn.

A $4bn dollar project by Emirates Global Aluminium appeared to especially draw Trump’s attention, which he used to praise his tariff policy. The company said it would open the first aluminium smelter in the US since 1980.

“Here’s a big, very special project,” Trump said on Thursday.

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“Investing $4bn in Oklahoma. See, they are doing all of this work in the US with the aluminium…if they do it here (the UAE) they have to pay a big tariff to send it in… you're going to make it in the US. That’s amazing," he added. 

The US also said it secured a $1.4 trillion investment pledge from the UAE over ten years, but like other pledges announced by Trump, it's unclear if it will materialise. That figure is more than 200 percent of the UAE's annual GDP. 

But it’s the deals announced around AI that have drawn the most attention.

“Yesterday, the two countries also agreed to create a path for the UAE to buy some of the world’s most advanced AI semiconductors from American companies, it’s a very big contract,” Trump said while attending the US-UAE Business Council breakfast on Friday.

The UAE and Saudi Arabia appear on the cusp of purchasing millions of AI chips from US companies and using American technology to build Data centres.

The sale of such huge quantities of AI chips to the Gulf has sparked a rally in semiconductor stocks, but is becoming a contentious issue in Washington.

On Thursday, the US and UAE signed an agreement for the Gulf country to build the largest AI campus outside the US. The UAE’s state-owned tech group, G42, plans to operate the campus.

The New York Times reported that Nvidia would sell hundreds of thousands of the most advanced chips annually to the UAE, as it builds the data centre hubs. According to the report, the vast majority of the chips would go to US cloud service providers, and about 100,000 to G42.

US chipmaker Qualcomm also announced plans to help develop a new “global engineering center” in Abu Dhabi.

The deals depend on the Trump administration allowing the UAE to import potentially up to one million advanced semiconductors manufactured by US companies. 

The Biden administration severely restricted which chips the Gulf states could buy. The UAE and Saudi Arabia lobbied the Trump administration in recent months to address concerns that they could be trusted with American products and not leak the technology to China.

Earlier this week, Trump’s Department of Commerce (DOC) said it was cancelling the Biden administration’s "AI Diffusion Rule", which restricted chip exports, calling it “misguided”.

On Thursday, the DOC announced the establishment of a "US-UAE AI Acceleration Partnership” to establish a framework to protect US technology.

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