U.S. Eases Chip Controls on UAE, but Trump Remains Most Concerned: If We Don’t Sell, China Will

According to a report by CNBC on July 10, the U.S. Department of Commerce took a step toward easing export controls on the UAE this Friday, including stating it would "actively review" export license applications from MGX—a UAE-backed investment firm.

A newly drafted 17-page rule, not yet published in the Federal Register, mentions that the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) will actively review applications involving MGX’s semiconductor products and shipments to servers in the UAE.

MGX is also an investor supporter of AI giants OpenAI and Anthropic.

This broader rule also grants the UAE government, Abu Dhabi’s artificial intelligence group G42, and its cloud computing subsidiary Core42 eligibility for license exemptions on certain advanced computing equipment.

Democratic Senator Elizabeth Warren from Massachusetts criticized the new rule, saying, “Under Trump-led Commerce, G42 is now being granted permission to obtain cutting-edge artificial intelligence (AI) chips without licenses, while MGX is being given preferential treatment—despite prior reports raising concerns about sensitive technologies potentially being transferred to China and other national security risks.”

She demanded that Commerce Secretary Howard Lutnick and Deputy Under Secretary Jeffrey Kessler testify before Congress, “to explain how this deal could jeopardize U.S. national security.”

Under the new rule, certain controlled equipment used by Amazon, Apple, Google, Meta, Microsoft, OpenAI, Oracle, and xAI in their operations and data center projects in the UAE will receive streamlined approval treatment.

The reports suggest these adjustments may accelerate chip sales by reducing the need for individual export license applications, but they will not eliminate existing regulations designed to prevent sensitive technologies from reaching restricted users or countries such as China.

Last May, The Wall Street Journal cited informed sources saying that due to concerns over advanced U.S. semiconductors flowing into China, the U.S. government had reconsidered its stance and blocked the UAE’s purchase of NVIDIA AI chips.

Many U.S. officials worry that Chinese tech companies attempting to sell chips in the Middle East might take advantage of this setback to “move in,” such as David Sacks, White House Coordinator for Artificial Intelligence and Cryptocurrency Affairs.

He questioned, “I don’t really understand why this is causing controversy in Washington. In regions like the Gulf States, countries must choose between American technology or Chinese technology.”

“If we don’t allow these nations to buy American technology, we’re just pushing them into China’s arms. Some say Chinese tech exports will take years, but now there are reports showing Chinese firms are already marketing chips overseas,” he added. “So, we can’t restrict American companies’ hands.”

The Chinese Foreign Ministry has repeatedly emphasized opposition to politicizing, instrumentalizing, or weaponizing science and technology and economic and trade issues, maintaining a consistent and clear stance against malicious blockades and suppression of China. Such actions disrupt the stability of the global industrial chain and do not serve the interests of any party.

Original source: toutiao.com/article/1870381087341579/

Disclaimer: The views expressed in this article are solely those of the author.