Key Points
- New U.S. Commerce rule simplifies AI chip exports to Middle East data centers via Validated End User (VEU) status.
- The rule balances international AI development with safeguarding U.S. technology.
- G42, a UAE-based AI firm with former ties to China, is being scrutinized under the new policy.
- Rigorous vetting and on-site inspections are part of the application process for data centers.
On Monday, the U.S. Commerce Department introduced a new rule that simplifies the export process for artificial intelligence (AI) chips, such as those from Nvidia, to data centers in the Middle East. Since October 2023, U.S. exporters have required licenses to ship advanced AI chips to parts of the Middle East and Central Asia. However, the new rule allows data centers to apply for Validated End User (VEU) status, enabling them to receive AI chips through a general authorization, bypassing the need for individual licenses from U.S. suppliers.
The new policy aims to balance promoting international AI development with safeguarding U.S. technology. According to a U.S. official, foreign data centers applying for the VEU program will be scrutinized. The United States will work closely with these data centers and their host governments to ensure the technology is used securely and not diverted to unauthorized entities.
Nvidia, based in Santa Clara, California, and recognized as the leading global AI chip supplier, declined to comment on the new rule. The move comes amid rising concerns in Washington that the Middle East could serve as a gateway for China to acquire advanced U.S. chips, which are banned from being shipped directly to China.
One company under particular scrutiny is G42, a UAE-based AI firm with historical ties to China. G42 became a focus of U.S. concerns after Microsoft announced a $1.5 billion investment in the company in April 2023, with plans to provide G42 with AI chips and model weights, a type of data that enhances an AI model’s ability to mimic human reasoning. This deal raised alarms among China hardliners in Congress, even though G42 stated earlier that it had divested from China and accepted U.S. restrictions to work with American firms. G42, which operates data centers, did not respond to a request for comment.
The Commerce Department stressed that data centers applying for VEU status would be subjected to a detailed vetting process, including assessments of their customers, business activities, cybersecurity protocols, and access restrictions. Applicants must also agree to on-site inspections by U.S. officials, while host countries may be asked to provide assurances that the technology will be used securely. The department will also limit the quantity and type of technology exported to specific data centers.
A Commerce official, Alan Estevez, emphasized that the Bureau of Industry and Security is committed to advancing international AI development while mitigating risks to U.S. and global security.
