US Greenlights Nvidia AI Chips for UAE; Is a Tech Race Brewing?

• Microsoft has secured U.S. approval to export advanced Nvidia AI chips, including the powerful GB300 GPUs, to the United Arab Emirates.
• The news triggered a 2.17% surge in Nvidia's stock, signaling strong investor confidence in the landmark deal.
• This approval is a cornerstone of Microsoft's broader $15.2 billion investment in the UAE, aimed at cementing the nation's status as a global AI hub.
• The deal proceeded under "stringent technology safeguards," marking a significant step in U.S.-UAE tech collaboration.

US Approves Landmark Nvidia Chip Sale to UAE

In a move that signals a major shift in global technology dynamics, Microsoft announced Monday it has secured export licenses from the U.S. Commerce Department to ship high-performance Nvidia AI chips to the United Arab Emirates. The approval, which sent Nvidia's shares climbing by 2.17%, is set to accelerate the Gulf nation's ambitious push into artificial intelligence.

A Strategic Move for Global Tech Leadership

The licenses, granted in September, allow Microsoft to ship the equivalent of 60,400 additional A100 chips, and notably include Nvidia’s more advanced GB300 GPUs. This makes Microsoft the first company to receive such an approval under the current administration, which was granted based on “updated and stringent technology safeguards.”

“While the chips are powerful and the numbers are large, more important is their positive impact across the UAE,” Microsoft stated in a blog post. “We’re using these GPUs to provide access to advanced AI models from OpenAI, Anthropic, open-source providers, and Microsoft itself.”

Bolstering a Growing Partnership

Speaking at the ADIPEC conference in Abu Dhabi, Microsoft President Brad Smith expressed his gratitude to the U.S. government and highlighted the strong, bipartisan relationship between the two countries.

“We’re very grateful to the Secretary of Commerce Howard Lutnick, and the work that he has championed to enable export licenses to be made available to us,” Smith told CNBC. He emphasized that the partnership has spanned multiple administrations, reflecting a deep-seated collaboration.

This chip deal is part of a much larger commitment from Microsoft, which is set to increase its total investment in the UAE to $15.2 billion by 2030. This includes a $1.5 billion equity investment in AI firm G42 and over $5.5 billion for expanding Microsoft’s cloud and AI infrastructure in the region.

Market and Expert Reactions

The market reacted swiftly to the news, with Nvidia (NVDA) shares closing up 2.17%. Microsoft (MSFT) saw a slight dip of 0.17% on the day. Analysts view the development as a critical enabler for the UAE's economic strategy. Azad Zangana, head of GCC macroeconomic analysis at Oxford Economics, noted that Nvidia’s chips are “crucial” for the UAE’s ambition to become a major global AI player, providing the cutting-edge hardware needed to compete on a global scale.

The Future of AI in the Gulf

Brad Smith underscored that Microsoft's massive investment is fundamentally about building a foundation of trust. “It’s that combination of technology, talent and trust that you’re seeing come together here in the UAE, around AI, around technology, but really the future of the whole economy,” he said. This deal solidifies the UAE's position not just as a consumer, but as a key developer and hub in the fiercely competitive AI landscape.