The Trump administration is considering a deal that could ship hundreds of thousands of U.S.-designed artificial intelligence chips to G42, an AI company in the United Arab Emirates that the U.S. government has scrutinized in the past for its ties to China, according to three people familiar with the matter.

The ongoing negotiations highlight a major shift in U.S. tech policy ahead of President Trump's visit to the Persian Gulf nation this week. The talks have also heightened tensions within the Trump administration, between tech and business-minded leaders who want a deal before Trump's visit and national security officials who worry the technologies could be misused by the UAE.

The Trump administration has embraced a direct deal for artificial intelligence chips with Middle Eastern officials to strengthen U.S. ties in the region, according to people familiar with the matter, who requested anonymity because the talks are ongoing. The approach is a stark departure from the Biden administration's, which has resisted similar sales of artificial intelligence chips amid concerns they could allow authoritarian governments with close ties to China to surpass the U.S. in developing cutting-edge AI models in the coming years.

White House Artificial Intelligence

In talks with G42 and UAE officials, David Sacks, the White House artificial intelligence chief, has been trying to reach a deal that would allow the Emirati company to use the chips with limited oversight. Some of the chips will be provided to G42's partnership with U.S. company OpenAI, while others will be sent directly to G42, one person familiar with the matter said. He added that the agreement has not been finalized.

The Trump administration is also expected to announce a deal with Saudi Arabian officials this week, according to two people familiar with the matter. The deal would give the Saudi government and its new AI company, Humain, access to tens of thousands of semiconductors and technology from Nvidia and its AI chip rival AMD.

The U.S. began requiring licenses for AI chips during the Biden administration because they help governments develop surveillance technology.

The Trump administration's reforms could reshape the arms race between countries eager to develop AI. A big jump in chip sales would be a boon for G42, potentially catapulting the Emirati company into one of the most powerful AI companies outside the U.S. It would be a powerful catalyst for the business of Nvidia, the world's leading AI chip maker. It would also fulfill OpenAI's years-long effort to bring more computing power to the Middle East.

The sale of hundreds of thousands of advanced chips could "hand control of the future of AI to countries whose political systems we shouldn't fundamentally trust," said Alasdair Phillips-Robins, a fellow at the Carnegie Endowment for International Peace and a former Commerce Department official.

"There's a reason these countries are so keen to get these chips, and it's not just for the financial rewards," he said. "AI is going to be the backbone."

The White House and G42 have not yet responded to requests for comment. OpenAI also declined to comment.

Mr. Sachs has been in the Middle East for several days, working on this and other deals. On Sunday, he posted a photo on social media of himself with Sheikh Tahnoun bin Zayed Al Nahyan, the UAE's national security adviser and chairman of G42, and said they discussed their countries’ AI initiatives and opportunities.

"The United States must be the partner of choice for our friends and allies - otherwise other countries will fill the void," Sachs wrote on social media platform X.

Sheikh Tahnoon said on social media that the talks were part of strengthening economic ties between the two countries. He added: "Cooperation in advanced technology is the cornerstone of building a smart, sustainable, digital future that meets the expectations of future generations."

G42 is the UAE's pioneering effort to build an AI industry and reduce its reliance on oil revenues. The company is controlled by Sheikh Tahnoon. It owns a $10 billion tech investment fund, an Arabic AI model, a tech talent platform, a healthcare company and a genome sequencing project.

The company has been eager to obtain U.S. chips for years, but negotiations with the Biden administration have been slow due to concerns about its ties to China.

U.S. congressional committee

In 2023, a U.S. congressional committee wrote to the U.S. Department of Commerce, urging it to investigate whether trade restrictions should be imposed on G42.

The Biden administration spent months negotiating with Microsoft on security protections and a partnership before agreeing to sell chips to G42 in 2024. Under the agreement, Microsoft is responsible for managing chips used to train and develop AI models, while G42 is allowed to sell Microsoft services that use those chips.

But after the deal was reached, G42 pressured U.S. officials for more chips and wanted to be able to operate directly. OpenAI CEO Sam Altman also lobbied the U.S. government to approve the sale of more chips to the region.

Due to a shortage of computing power in the United States, Altman has been working with UAE officials to expand global computing power. He hopes to increase the supply of chips and data centers because he believes it will enable OpenAI to build more powerful AI systems.