In mid-July, U.S. Commerce Department officials were still suspending approval of Nvidia's license to export artificial intelligence chips to the United Arab Emirates, causing a deal that President Trump hailed as a "trade breakthrough milestone" in May to stall. What once seemed like a done deal now hinges on new safety assurances.
The focus of the controversy centers on Abu Dhabi artificial intelligence company G42, which originally planned to receive about 20% of the chips. The U.S. Department of Commerce is concerned that, given G42’s past cooperative relationships, other countries may indirectly acquire Nvidia’s most advanced chip technology.
To dispel doubts, G42 has agreed to divest shares of certain partners and has pledged that for every data center it builds in the UAE, it will build a counterpart facility of the same size in the United States.
This security impasse has forced the suspension of the Stargate UAE data center construction project. The project is jointly participated by G42, OpenAI, Oracle, Nvidia, SoftBank and Cisco. The first phase of the 200-megawatt cluster was originally scheduled to be put into operation in 2026. If the chip license is not approved in time, it may be postponed. Nonetheless, both sides said they are continuing to negotiate on strengthening supervision and revising terms.
Investors and industry observers are paying close attention to three major developments: the U.S. Department of Commerce’s final license approval, revised terms that restrict G42’s direct access to chips, and public statements from key figures such as Nvidia CEO Jensen Huang, who has been lobbying for the deal to continue. The follow-up focus will be on new developments in licensing approvals and the final fate of the Stargate UAE project.