US Moves To Facilitate AI Chip Shipments To Middle East

Shipments of advanced artificial intelligence (AI) chips to data centres in the Middle East could become easier under a new US Commerce Department rule.

The rule will allow data centres in the region to apply for Validated End User status, under which US tech companies will be authorised to sell advanced chips to the firms under a general authorisation.

Since October 2023 US companies have had to apply for licences to ship such technology to companies in parts of the Middle East and Central Asia.

The restrictions are part of broader moves to cut off the supply of advanced technologies to China, with the Middle East seen as a possible intermediary through which Chinese companies could obtain restricted technologies.

Review process

The US will work with data centres that apply for Validated End User status as well as host governments to ensure safety and security, an official said.

Applicants will have to undergo a review process that includes disclosing information about current and potential customers, business activities, access restrictions and cybersecurity, the Commerce Department said in the rule.

Applicants must also agree to reporting requirements and on-site inspections by US government representatives, while host countries may need to provide assurances regarding the secure use of the technology.

The programme will place limits on quantities and types of technology that can be exported to a given data centre, an official said.

The department said the review process would ensure US technology would not be diverted or used in a way contrary to national security.

The Commerce Department’s Bureau of Industry is “committed to facilitating international AI development while mitigating risks to US and global security”, department official Alan Estevez stated.

Middle East concerns

United Arab Emirates (UAE) artificial intelligence (AI) firm G42, which previously had relations with China, in June reached a $1.5 billion (£1.2bn) investment deal with Microsoft under which it agreed to use American rather than Chinese technology.

G42 had previously worked with Huawei, which is a major operator of data centres and is developing its own AI chips, primarily for domestic use in China.

“The effort to work with Microsoft as an alternative to Huawei is generally a positive development and one that we want to encourage,” said White House technology advisor Tarun Chhabra at the time.

Analysts have noted that the US restrictions have had the unforseen consequence of spurring Chinese companies to develop the needed technology, such as AI chips, memory chips and semiconductor manufacturing equipment.