The multibillion-dollar deal was announced in May, but the commerce secretary has since pushed the U.A.E. for certain U.S. investments first.
A multibillion-dollar deal to send Nvidia’s artificial-intelligence chips to the United Arab Emirates is stuck in neutral nearly five months after it was signed, frustrating Chief Executive Jensen Huang and some senior administration officials.
The delays are a setback to Huang and White House AI Czar David Sacks, who hoped to see the deal advance quickly to highlight a new U.S. tech strategy focused on exports, according to people familiar with the matter. They see agreements like the U.A.E. deal as key to the U.S. staying ahead of China in the AI race.
Under the deal, which was announced in May, the U.A.E. promised to invest in the U.S. in exchange for up to several hundred thousand Nvidia chips a year. But the investment hasn’t materialized after months of talks, baffling some administration officials who don’t know the reason for the delay, the people said.
The future of the agreement is largely in the hands of Commerce Secretary Howard Lutnick, who initially championed the deal. The Commerce Department’s approval is critical to getting the deal done because the agency has to give Nvidia and others involved permission to send the chips to the U.A.E.
The commerce secretary has pressed the Emiratis to finalize their U.S. investments before his department authorizes the delivery of the chips, some of the people said. Those prolonged conversations have slowed the deal, they said.
This summer, Lutnick and some administration officials also worried about national-security risks because the U.A.E. is close to China. That relationship fueled fears that the chips could benefit China’s AI industry, and held up the deal.
US President Donald Trump and UAE President Sheikh Mohamed bin Zayed al-Nahyan shake hands in front of a model of the UAE USA AI Cluster, with US Secretary of Commerce Howard Lutnick looking on.
The negotiations have high stakes for Lutnick, who has come under fire for the rollout of tariffs and a new $100,000 fee for applicants seeking H-1B visas popular among tech companies. Tension with Nvidia, the world’s biggest company with a nearly $4.6 trillion market value, could be a major test between the White House and the company.
Huang and various Nvidia executives have complained privately about Lutnick’s tactics and the slow progress to other administration officials, some of the people said. Sacks and others in the administration are also annoyed, they said. One senior administration official said Lutnick hasn’t held up the deal, but other administration officials contended he had slowed the process down.
The U.A.E. is progressing ahead with its agreement using a 1:1 ratio of the nation’s investment in the U.S. in exchange for billions of dollars worth of Nvidia’s chips, the senior administration official said. At least $1 billion will be sent from the U.A.E. to the U.S. in exchange for at least $1 billion worth of Nvidia chips by the end of the year, according to the official. The U.A.E. would have to pay separately for the chips, some other people said.
A senior Nvidia executive said Huang and others haven’t complained and said the company isn’t concerned with how the deal has been handled. White House spokesman Kush Desai said in a statement that “Sacks and Secretary Lutnick are integral to the President’s AI agenda and are working diligently to get deals done on behalf of the American people.” A spokeswoman for Sacks declined to comment. The U.A.E. Ministry of Foreign Affairs didn’t respond to a request for comment.
Nvidia CEO Jensen Huang, US Interior Secretary Doug Burgum, Environment Protection Agency (EPA) administrator Lee Zeldin and Commerce Secretary Howard Lutnick speak at the "Winning the AI Race" AI Summit.
Huang has praised Lutnick publicly, saying recently that the commerce secretary is the person he talks to most in the administration. The Nvidia CEO is walking a tightrope between the U.S. and China, trying to keep both countries hooked on chips without getting caught in their trade spat.
Trump praised the U.A.E. chip deal during the first overseas trip of his second term in May, which highlighted U.S. AI technology and hopes other countries would adopt it instead of China’s. The White House at the time said Trump secured over $200 billion in U.S.-U.A.E. deals, including an agreement between both nations to help develop U.S. technology and manufacturing.
The U.A.E committed to investing, building or financing U.S. data centers for training AI models, the White House said at the time. The U.A.E. has also done deals with the Trump family’s crypto venture and is part of the investor group taking control of TikTok’s U.S. operations.
The administration’s discussions with the U.A.E. are the latest example of the president’s team pressing corporations and countries to invest in the U.S.
Lutnick recently negotiated a deal with Japan in which the country agreed to invest $550 billion in the U.S., putting the money into a fund overseen by the commerce secretary. Trump and Lutnick recently used nearly $9 billion in federal grants to take an equity stake in Intel.
Nvidia is also working with Lutnick to get the licenses it needs to send chips to China. Trump and Lutnick asked the company to give the government 15% of the chip sales to China for a chip called the H20 in August, a move that some lawyers say amounts to an illegal export tax.
Under the terms of the U.A.E. agreement, most of the chips would go to U.S. companies operating in the Middle East nation.
Some administration officials have raised issues with the involvement of G42, an Abu Dhabi-based AI firm that is supposed to be part of the agreement, the Journal previously reported. They worry that chips sent directly to G42 could end up being diverted to China. The Commerce Department currently doesn’t plan to approve chips going directly to G42, but it may in the future.
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