US Takes Steps to Make AI Chip Shipments Easier to the Middle East

The US Department of Commerce has made it easier for data centers in the Middle East to get important AI chip technology.

Under a new rule from the US Commerce Department, it might be easier to send advanced artificial intelligence (AI) chips to data centers in the Middle East.

The rule says that data centers in the area can ask for Validated End User status. If they do, US tech companies will be able to sell advanced chips to those centers without any restrictions.

Companies from the US have had to get licenses since October 2023 in order to send this kind of technology to companies in some places of the Middle East and Central Asia.

China will not be able to get as many advanced technologies as it wants because of these limits. The Middle East is seen as a possible way for Chinese companies to get these technologies.

A US source said that the country will work with host governments and data centers that want to become Validated End Users to make sure safety and security.

The Commerce Department said in the rule that applicants will have to go through a review process that includes giving details about current and future customers, business activities, access restrictions, and cybersecurity.

Applicants must also agree to be inspected by US government officials and to report on their activities. Host countries may also need to give guarantees that the technology will be used safely.

An official said that the program will limit the amount and type of technology that can be sent to each data hub.

The department said that the review process would keep US technology from being misused or put to bad use that would hurt national security.

The United Arab Emirates (UAE) company G42 used to do business with China. In June, it made a $1.5 billion (£1.2bn) investment deal with Microsoft and agreed to use American technology instead of Chinese technology.

Huawei is a big company that runs data centers and is making its own AI chips, mostly for use in China. G42 has worked with Huawei before.

Analysts have said that the US restrictions have had the unintended effect of pushing Chinese companies to make the technology that is needed, like AI chips, memory chips, and tools for making semiconductors.