Focus on securing investment
Trump in Gulf May 13-16
Artificial intelligence is expected to be top of the agenda during US president Donald Trump’s visit to Qatar, Saudi Arabia and the United Arab Emirates in mid-May, with officials from all sides eager to announce fresh partnerships.
Discussions are likely to focus on securing more GCC investments into US technology and expanding Gulf states’ access to advanced American semiconductors.
The partners will have to find common ground on protecting Gulf commercial interests and American national security concerns linked to China, according to industry watchers.
“It’s really important that the United States and the GCC countries form close partnerships on the technologies that are meaningful to national security when our interests align,” says Thea Kendler, a partner at Mayer Brown in Washington, who until January served as assistant secretary for export administration at the US commerce department.
Saudi Arabia and the UAE have committed a combined $2 trillion of future investment in America since Trump returned to the White House, much of it for sensitive technologies.
The president is now gearing up to travel to the region on May 13-16 to ask for even bigger sums.
What portion of these pledges materialises will in part depend on how the treasury department-led Committee on Foreign Investment in the United States (CFIUS) assesses their national security impact.
Mohammed Soliman of McLarty Associates and the Middle East Institute in Washington expects CFIUS to be front-and-centre during Trump’s trip.
“I don’t really understand how we’re going to maintain a restrictive CFIUS process and at the same time expect trillions of dollars of investment,” he says. “None of those countries want to invest in brick and mortar, they want to put money in chips, data centres, space tech – all the critical stuff.”
GCC states also aim to build world-leading AI ecosystems of their own, for which they require best-in-class semiconductors.
“One way they could be pitching it is that in exchange for massive investments in the US, they would like the Trump administration to green light the export of more chips to the Gulf,” says Sam Winter-Levy, a fellow for technology and international affairs at the Carnegie Endowment for International Peace.
The Biden administration placed limitations on sales of US semiconductors to the Middle East, seen as a possible back door to Chinese military access, in October 2023.
Negotiations then led to a deal between Emirati AI developer G42 and Microsoft whereby the former divested its stakes in Chinese tech companies.
Agreements followed between Saudi Arabia’s Public Investment Fund and Google, Abu Dhabi’s MGX and Open AI, and the Qatari government and California-based Scale AI.
According to Winter-Levy, the Trump team could now allow US cloud companies to build more data centres in the region, or expand direct purchases by Gulf businesses of the American semiconductors they need to do so independently.
“There are different risks associated with those two models,” he says.
Under the first scenario, US foreign policy could become dependent on a Gulf that hosts many joint data centres. The second approach could empower local players to apply the latest in AI to weapons design, intelligence collection and cyber tools.
“My understanding is that the debates on this within the administration are still playing out,” Winter-Levy says.
One way or the other, sources think Trump’s Gulf trip may yield the outlines of government-to-government agreements laying out standards that would enable Qatar, Saudi Arabia and the UAE to purchase US chips in numbers above current limits set by the Framework for Artificial Intelligence Diffusion. This was issued in the waning days of the Biden White House.
Reuters reported on Wednesday that Trump officials are working to revise the rule to give such government-to-government negotiations even more centrality.
As part of ongoing talks with the UAE specifically, the Commerce Department and the White House are considering raising limits on Emirati purchases of Nvidia chips, Bloomberg said on Thursday.
“I think concern about China’s military development using technologies like AI is nonpartisan,” Kendler tells AGBI. “That national security focus is key to the Trump administration from what I’ve observed, and it was key to the Biden administration.”
But Washington cannot expect the Gulf to decouple completely from China, its largest trading partner and buyer of its oil, sources say.
“Our view in the Biden administration was always that this is a conversation about the most sophisticated and advanced technology where national security comes into play,” Kendler says. “This is not about standard commercial technology.”
Like Biden, President Trump has to juggle competing views from the pro-business and national security camps of his administration.
Soliman warns of a “rising current” of policymakers in Washington of all political stripes who are “very hawkish” and see any engagement with China as “almost a betrayal”.
“I don’t think this is a healthy way to think about it right now in a multi-polar economic order,” he says.
Winter-Levy says “there is a deal to be done” whereby Washington allows US companies to build some new data centres in the Gulf with local counterparts, but prevents them from offshoring their most sophisticated capabilities.
“And they should make sure that UAE and Saudi tech companies can get enough chips to train models a little bit behind the state of the art,” he says.
