The U.S. Commerce Department recently upgraded the United Arab Emirates (UAE) under its export control laws, making it significantly easier for the Gulf state to acquire advanced U.S. technologies, including cutting-edge AI chips and military equipment. This decision means the UAE government and approved commercial entities, such as its tech champion G42 and its Core42 unit, along with the Abu Dhabi fund MGX, no longer require a U.S. government license to purchase AI chips from companies like Nvidia Corp. and Advanced Micro Devices Inc. This rule change also extends to eight U.S.-headquartered companies and their UAE subsidiaries—Amazon.com Inc., Alphabet Inc.'s Google, Apple Inc., Meta Platforms Inc., Microsoft Corp., OpenAI, Oracle, and SpaceX unit xAI—allowing them to buy AI processors without a license. This move shifts the UAE into a country grouping typically reserved for NATO members and other close allies, making it the only country in this group not a member of multilateral export control regimes.
The Commerce Department cited the UAE's steps to safeguard sensitive American technology, its growing trade ties, and its support for the U.S. in the war against Iran as reasons for the policy change. The department specifically mentioned the UAE's "key role advancing U.S. interests during Operation Epic Fury," referring to U.S.-Israeli strikes on Iran that began in February. This decision also loosens restrictions on sales of commercial satellites, spacecraft, military equipment, and products used in civilian nuclear power generation, opening opportunities for a broad range of U.S. manufacturers. The UAE is also the largest U.S. trading partner in the Middle East, with foreign direct investment from the emirates valued at over $1 trillion.
The policy change has, however, drawn objections from national security experts and some U.S. lawmakers. Senator Elizabeth Warren, for instance, raised concerns about the potential for the diversion of sensitive technology to China and other national security risks, calling for Commerce Secretary Howard Lutnick and Bureau of Industry and Security Director Jeffrey Kessler to explain the decision. Critics like Chris McGuire of the Council on Foreign Relations warned that the UAE could become a "backdoor for China" to access American technology and exacerbate the existing supply shortage of AI chips in the U.S. This concern is partly due to G42's historic ties with Huawei Technologies Co., although G42 has recently sought to distance itself from the Chinese tech giant. Despite these concerns, UAE Ambassador Yousef Al Otaiba hailed the decision as an affirmation of long-standing U.S.-UAE cooperation.
