US Sets New Rule to Spur AI Chip Shipments to Middle East

On Monday, the US Commerce Department released a rule that could make it easier for companies like Nvidia Corp to send AI chips to data centers in the Middle East

U.S. producers have had to get licenses before sending advanced chips since October 2023 in some parts of the Middle East and Central Asia.
Data centers can apply for Validated End User status if they follow the new rule. This will let them receive chips without their U.S. providers having to get individual licenses to ship to them.

An official from the U.S. said that the country would work with host governments and foreign data centers that apply for the Validated End-User program to ensure the technology is safe and secure.

Nvidia, based in Santa Clara, California, and makes the most AI chips worldwide, refused to comment.
Washington is getting more worried that the Middle East could become a way for China to get advanced American chips that can’t be sent straight to China. This is why they made the move.

Concerns have been raised about G42, an AI business based in the UAE with ties to China that have been going back a long time. Microsoft Corporation said in April that it would spend $1.5 billion in the company and give G42 chips and model weights, which are complex pieces of data that help AI models think like humans.

China-haters in Congress were suspicious of the deal, even though G42 said in February that it had cut ties with China and was willing to follow US rules that required it to work with US companies.

G42, a company that owns data centers, did not immediately reply to a request for comment.
The Commerce Department said in a statement that data centers that want to be part of the program will have to undergo a strict review process to ensure that safeguards are in place to keep U.S. technology from being misused or redirected in ways that are harmful to national security.

The rule says the screening process includes looking into current and future customers, business activities, access restrictions, and security.