US-UAE AI chip deal stalled over national security fears. The huge agreement to sell billions in Nvidia AI chips to the UAE is now on pause. The worry? These chips could be rerouted to China.
The Wall Street Journal reports U.S. officials are cautious despite initial UAE and Saudi promises of safeguards against chip smuggling. Concerns have grown recently over how these powerful AI chips might reach China through third parties.
The Trump administration is also eyeing export limits on Thailand and Malaysia. Malaysia just enforced new export permits for U.S. AI chips to tighten control. 
The Wall Street Journal adds:
The deal, which gives the green light to the UAE to buy billions of dollars worth of AI chips from Nvidia and other semiconductor companies, is on hold due to concerns in the U.S. that these AI chips could end up in China.
This potential chip smuggling was a concern when the deal was initially formed, but officials from the UAE and Saudi Arabia assured the U.S. they had safeguards in place.
Expect ongoing scrutiny on AI chip exports as tensions rise around global supply chains and national security.
