Trump Administration Considers Large Chip Sale to Emirati A.I. Firm G42
The firm, which the U.S. government scrutinized for its ties to China, is angling for hundreds of thousands of advanced artificial intelligence chips in a deal that could be finalized this week.
President Trump’s artificial intelligence czar, David Sacks, right, has been negotiating a deal that could send U.S.-designed A.I. chips to an Emirati company. Haiyun Jiang for The New York Times
By Ana Swanson and Tripp Mickle Ana Swanson reported from Washington, and Tripp Mickle from San Francisco.
May 12, 2025
The Trump administration is considering a deal that could send hundreds of thousands of U.S.-designed artificial intelligence chips to G42, an Emirati A.I. firm that the U.S. government has scrutinized in the past for its ties to China, three people familiar with the discussions said.
The negotiations, which are ongoing, highlight a major shift in U.S. tech policy ahead of President Trump’s visit to the Persian Gulf states this week. The talks have also created tension inside the Trump administration between tech- and business-minded leaders who want to close a deal before Mr. Trump’s trip and national security officials who worry that the technology could be misused by the Emiratis.
The Trump administration has embraced cutting direct deals for A.I. chips with officials from the Middle East, as it looks to strengthen U.S. ties in the region, said the people, who spoke on the condition of anonymity because the negotiations are ongoing. The approach marks a break from the Biden administration, which had rejected similar A.I. chip sales over fears that they could give autocratic governments with strong ties to China an edge over the United States in developing the most cutting-edge A.I. models in coming years.
In the talks with G42 and officials from the United Arab Emirates, David Sacks, the White House A.I. czar, has been working on an agreement that would give the Emirati firm access to chips with limited oversight. Some of the chips would go to a partnership that G42 has with the U.S. firm OpenAI, while others would be sent directly to G42, one of the people said, adding that a deal is not yet final.
The Trump administration is also expected to announce a deal this week with officials in Saudi Arabia, two people with knowledge of the agreement said. The deal would give the Saudi government and its new A.I. company, Humain, access to tens of thousands of semiconductors and technology support from Nvidia and its A.I. chip rival, Advanced Micro Devices.
The United States began requiring a license for the purchase of A.I. chips during the Biden administration because of their value in helping governments develop military and surveillance technologies.
The Trump administration’s changes have the potential to reshape an arms race among nations, and countries eager to develop A.I. Major chip sales would be a boon for G42, potentially catapulting the Emirati firm to be one of the most powerful A.I. companies outside the United States. It would be a powerful catalyst for the businesses of Nvidia, the world’s leading A.I. chip maker. And it would fulfill OpenAI’s multiyear effort to bring more computing power to the Middle East.
---------- [Insert: From previous - Leading UK tech investor warns of ‘disconcerting’ signs of AI stock bubble [...]‘I have never seen such open corruption’: Trump’s crypto deals and loosening of rules shock observers https://investorshub.advfn.com/boards/read_msg.aspx?message_id=176666414 [...]“The more the President’s wealth depends on anonymous investors around the world with hidden agendas, the greater the risk to the interests of everyday Americans and our national security.” [...]Related: Donald Trump Is Mostly a Crypto Billionaire Now, Group Says [...]James Anderson was an early backer of Tesla, Amazon and China’s Tencent and Alibaba, generating vast returns for Baillie Gifford’s flagship fund. Now at the Italian investment company Lingotto, Anderson said he had not seen signs of an investment bubble until recently, when the ChatGPT developer, OpenAI, and its rival Anthropic announced hefty valuation increases. P - “Up until the last couple of months or so?… what surprised me in one sense is that there wasn’t really much sign of a bubble [in AI],” he told the Financial Times. P - OpenAI is reportedly in talks about a share sale that would value the startup at $500bn (£370bn), up from $300bn in April and $157bn last October. Anthropic almost trebled its valuation recently, going from $60bn in March to $170bn last month. P - “I think one needs to be honest that those sudden increases [in valuation] that people were willing to place on OpenAI, Anthropic and the like were disconcerting,” he said. “That scale of jump and the pace with which it happened did bother me.” P - Anderson also raised concerns about Nvidia’s investment of up to $100bn in OpenAI. Nvidia is a key player in AI infrastructure as a maker of the computer chips that are used in training and operating AI models, a position that has driven it to a stock market valuation of $4.5tn. Under the terms of the deal, OpenAI will pay Nvidia in cash for chips, and Nvidia will invest in OpenAI for non-controlling shares. P - Some commentary around the deal has raised parallels with vendor financing, where a company provides financial support to a customer buying its products. P - Anderson said he was a “huge admirer” of Nvidia but the OpenAI deal presented “more reason to be concerned there than before”. P - Referring to a practice common in the turn-of-the-millennium dotcom bubble .. https://www.theguardian.com/technology/2005/mar/10/newmedia.media, when telecom equipment makers lent money to customers, he said: “I have to say the words ‘vendor financing’ do not carry nice reflections to somebody of my age. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=176776043 ----------
Alasdair Phillips-Robins, a fellow at the Carnegie Endowment for International Peace and a former official in the Commerce Department, said a sale that included hundreds of thousands of advanced chips would risk handing “control of the future of A.I. to countries that have political systems that we shouldn’t fundamentally trust.”
“There’s a reason why these countries are so keen to get these chips, and it’s not purely the financial returns,” he said. “A.I. is going to be the backbone of militaries.”
The White House and G42 did not respond to requests for comment. OpenAI declined to comment.
Mr. Sacks has been in the Middle East for several days working on this and other deals. On Sunday, he posted a photo of himself on social media with Sheikh Tahnoon bin Zayed Al Nahyan, the national security adviser of the Emirates, who is also chairman of G42, saying they had discussed their nations’ A.I. plans and opportunities.
“The U.S. must make itself the partner-of-choice for our friends and allies — otherwise others will fill that gap,” Mr. Sacks wrote on X, the social media platform.
Sheikh Tahnoon said in a social media post that the discussions were part of strengthening economic ties between the countries. He added that “collaboration in advanced technologies serves as a cornerstone for building a smart, sustainable digital future that meets the aspirations of future generations.”
In 2023, a congressional committee wrote a letter urging the Commerce Department to look into whether G42 should be put under trade restrictions because it had partnerships with Chinese firms and employees who came from government-connected companies in China.
Before agreeing to sell chips to G42 in 2024, the Biden administration spent months .. https://www.nytimes.com/2024/04/16/technology/microsoft-g42-uae-ai.html .. negotiating security protections and a partnership with Microsoft. Under that agreement, Microsoft managed the chips to train and develop A.I. models, and G42 had permission to sell Microsoft services that use those chips.
But after cutting that deal, G42 pressed U.S. officials for more chips and wanted to be able to operate them directly. Sam Altman, the chief executive of OpenAI, also lobbied the U.S. government to approve more chip sales to the region.
Mr. Altman had been working with Emirati officials to expand global computing power because there had been a shortage of it in the United States. He wanted to increase the supply of chips and data centers because he believed it would allow OpenAI to build more powerful A.I. systems.
(The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.)
MGX, an Emirati investment firm, is an investor in OpenAI. Last year, it joined a group of investors that contributed $6.6 billion to the start-up.
A former Biden administration official said G42 had requested roughly 200,000 A.I. chips for its partnership with Microsoft, as well as at least 500,000 chips by 2026 that would be solely owned and operated by G42. Senior Biden administration officials, even those who were open to cooperation with the gulf states, saw those levels of sales as a nonstarter, the person said.
As Mr. Trump travels around the Middle East this week, he is expected to hail deals made with both governments and companies. The administration is also expected to showcase deals and negotiations across the region by American tech companies, including AMD, Nvidia, Microsoft, Google and OpenAI, according to six people familiar with the plans.
The Trump administration has also announced that it plans to repeal a Biden administration rule that capped the number of A.I. chips that could be sent to certain countries, in favor of direct deal-making with governments.
----- [The US AI Diffusion Rule: What is it, why did the United States rescind it, and implications for Australia Explainer by Tom Barrett Non-Resident Fellow, Economic Security United States Studies Centre Johanna Lim Research Associate, Strategic Technologies United States Studies Centre 21 July 2025 On 15 January 2025, just days before leaving office, the Biden administration published the Framework for Artificial Intelligence Diffusion, otherwise known as the AI Diffusion Rule (hereafter, the AI rule). It aimed to introduce a global framework for regulating transactions involving advanced AI model weights and high-performance computing (semiconductor) chips. This marked a significant departure from more targeted controls on dual-use technologies towards a more expansive, extraterritorial US approach to AI export controls. However, the rule drew strong criticism from industry, allies and experts over its vague language, limited enforceability and potential to hinder innovation and international collaboration. In May 2025, the Trump administration rescinded the rule, a few days before it was due to come into effect. P - With the rule now withdrawn, the United States sits at a critical juncture in redefining its strategy for controlling the export of advanced AI technologies. The rescission reflects a broader shift between administrations in how the US government intends to balance national security, global competitiveness and relationships with key allies. This explainer outlines how the AI Diffusion Rule evolved, why it was rescinded, and what might come next. In particular, it considers three policy pathways that may potentially eventuate as a replacement for the rule: (1) no new US global controls regime; (2) a revised, risk-based framework; or (3) an aggressive blanket rule with bilateral opt-outs. Each option reflects different trade-offs between enforceability, strategic control and international cooperation. https://www.ussc.edu.au/the-us-ai-diffusion-rule ] -----
The Middle East is most likely to be the first beneficiary of this change. Officials from the Emirates and Saudi Arabia have been negotiating with the Trump administration over the past two months to strike agreements that would provide them steady access to A.I. chips, deals which may be announced this week.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis.
Trump driving, others warning -- Jamie Dimon Warns U.S. Stocks Face Elevated Risk of Sharp Correction
----- "Leading UK tech investor warns of ‘disconcerting’ signs of AI stock bubble [...]James Anderson was an early backer of Tesla, Amazon and China’s Tencent and Alibaba, generating vast returns for Baillie Gifford’s flagship fund. Now at the Italian investment company Lingotto, Anderson said he had not seen signs of an investment bubble until recently, when the ChatGPT developer, OpenAI, and its rival Anthropic announced hefty valuation increases.
“Up until the last couple of months or so?… what surprised me in one sense is that there wasn’t really much sign of a bubble [in AI],” he told the Financial Times.
OpenAI is reportedly in talks about a share sale that would value the startup at $500bn (£370bn), up from $300bn in April and $157bn last October. Anthropic almost trebled its valuation recently, going from $60bn in March to $170bn last month.
“I think one needs to be honest that those sudden increases [in valuation] that people were willing to place on OpenAI, Anthropic and the like were disconcerting,” he said. “That scale of jump and the pace with which it happened did bother me.”
Anderson also raised concerns about Nvidia’s investment of up to $100bn in OpenAI. Nvidia is a key player in AI infrastructure as a maker of the computer chips that are used in training and operating AI models, a position that has driven it to a stock market valuation of $4.5tn. Under the terms of the deal, OpenAI will pay Nvidia in cash for chips, and Nvidia will invest in OpenAI for non-controlling shares." https://investorshub.advfn.com/boards/read_msg.aspx?message_id=176776043 -----
Related: Boss of US's biggest bank 'worried' about stock market collapse By CNN 6:59am Oct 10, 2025 [...]"Fired up by optimism about the productivity-enhancing potential of AI, global equity prices are surging," Kristalina Georgieva, managing director of the International Monetary Fund, said in a speech on Wednesday. "Today's valuations are heading toward levels we saw during the bullishness about the internet 25 years ago," Georgieva said. "If a sharp correction were to occur, tighter financial conditions could drag down world growth." https://www.9news.com.au/world/jp-morgan-boss-jamie-dimon-worried-us-stock-market-fall/59ac50b8-8d29-438a-a0cc-1f59898c5fe2
Fiona Craig Latest News October 11 2025 7:11AM
Jamie Dimon, CEO of JPMorgan Chase & Co., has cautioned that U.S. equities could face a “serious fall” within the next six months to two years, pointing to rising geopolitical and economic uncertainties.
In an interview with the BBC, Dimon said he was “far more worried than others” about the potential for a major decline in U.S. stocks, citing “a lot of things out there” that are creating instability. Among these concerns, he highlighted mounting geopolitical tensions, strained fiscal positions, and global remilitarization, which he described as “a lot of issues that we don’t know how to answer.”
Dimon also raised concerns about the current surge in investments tied to artificial intelligence, warning that some of this capital would “probably be lost.” AI has been a key driver of market gains this year, particularly benefiting large-cap technology companies with heavy exposure to the sector.
His remarks come as many investors and institutions draw parallels between the present AI boom and the dot-com bubble of the late 1990s. Earlier this week, the Bank of England warned that valuations in AI-focused firms appear “stretched” and could face a “sharp correction.” Despite these concerns, Dimon maintained a longer-term optimistic stance, telling the BBC he believes “AI in total will pay off.”
On Thursday, U.S. stock futures were mixed as traders digested the recent AI-fueled rally and the minutes from the Federal Reserve’s latest meeting. In the prior session, the S&P 500 and Nasdaq Composite closed at record highs.
Dimon also commented on political pressure facing the Fed. Although U.S. President Donald Trump has repeatedly urged the central bank and Chair Jerome Powell to cut rates aggressively, Dimon said he was willing to take Trump “at his word” that he would not interfere with the Fed’s independence. He stressed that maintaining the central bank’s autonomy remains critical to sound monetary policy.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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