President Trump is in a tight spot.
Amid the global race to dominate artificial intelligence (AI), Trump is facing growing pressure to withhold emerging American technology from foreign adversaries while making sure U.S. chipmakers dominate the global stage.
Trump’s tech policy was a priority of his visit last week to the Middle East, where he signed a slew of multibillion-dollar AI deals between U.S. companies and Gulf countries.
While the White House argued the investment will increase U.S. technology companies' global footprint, the idea of selling American-made AI chips to Gulf countries also raised security concerns back in the U.S.
“The Trump administration is trying to walk a geopolitical tightrope,” emerging tech and geopolitical researcher Tobias Feakin told The Hill.
“It wants to contain China’s AI ambitions without choking off the global reach of its own tech champions,” Feakin added. “That’s an increasingly difficult balance to maintain in a world where supply chains, research ecosystems, and compute infrastructure are transnational by design.”
Gulf deals draw scrutiny
The backlash is highlighting the dilemma the White House faces in balancing innovation and national security.
AI chips are a critical component to the AI race, serving as the power for AI technology. The AI chips are specifically designed to meet the high demands of AI functions, which is not possible with traditional chips.
Washington is increasingly concerned with China getting its hands on American tech, including if it comes through third-party deals. In response to those fears, both the Biden and Trump administrations have tightened export controls on advanced chips.
Fears ramped up among lawmakers and government officials earlier this year following the release of Chinese AI startup DeepSeek’s new, high-performing models, which the firm claims were built at the fraction of the price of U.S. models.
Reports have circulated of U.S.-made chips being smuggled into China despite the tightened export controls.
Republican Rep. John Moolenaar (Mich.), the chair of the House Select Committee on China, said any AI deal needs “scrutiny and verifiable guardrails.” He expressed concerns with deals under consideration between the Trump administration and Abu-Dhabi based firm G42, which has reported ties to China.
Under a new agreement between the United Arab Emirates and the U.S., G42 will build a massive 5G data center in Abu Dhabi that is expected to be the largest AI campus outside the United States.
“The U.S. must lead the world in AI technology—but we must do it securely,” Moolenaar wrote on X. “The CCP is actively seeking indirect access to our top tech.”
“We raised concerns about G42 last year for this very reason – and we need safeguards in place before more agreements move forward,” he added.
While China has developed much closer economic ties to Persian Gulf countries, geopolitical experts note they do not compare to China’s relations with U.S. adversaries like Iran and North Korea.
“It’s a little more of a soft issue of would there be more opportunities for either individual companies or actors that could see a benefit in starting to sell chips or components... to China that violate U.S. export controls?” said Alison Szalwinski, vice president of The Asia Group.
When asked about the scrutiny over the deals, a White House spokesperson said the agreement will "help ensure the global AI ecosystem will be built with American chips and use American models."
"The agreement also contains historic commitments by the UAE to further align their national security regulations with the United States, including strong protections to prevent the diversion of U.S.-origin technology," White House spokesperson Anna Kelly wrote in a statement.
Administration, tech leaders dismiss concerns
Commerce Secretary Howard Lutnick tried to quell concerns about the deal with G42, stating the agreement has “strong security guarantees” to prevent the diversion of U.S. technology to foreign adversaries.
David Sacks, the White House’s crypto and AI czar, fiercely pushed back against the criticism, writing on X, “The only question you need to ask is: does China wish it had made these deals? Yes of course it does.”
“But President Trump got there first and beat them to the punch,” Sacks added.
Leaders of the country’s largest technology firms are lining up behind the deals, which stand to bring their private companies more cash and stretch their global footprint.
In a repost of Sacks’s remarks, OpenAI CEO Sam Altman said “this was an extremely smart thing for you all to do and I'm sorry people are giving you grief.”
Altman was among the various technology leaders on the White House trip, and Bloomberg reported OpenAI is expected to help develop the 5G data center.
Nvidia CEO Jensen Huang, who also attended the trip, also brushed off concerns about diversion over the weekend. Nvidia makes some of the world’s most popular computer chips powering the AI race and is the second-largest publicly traded U.S. company.
“There’s no evidence of any AI chip diversion. ... These are massive systems. The Grace Blackwell system is nearly two tons, and so you’re not going to be putting that in your pocket or your backpack anytime soon,” he told reporters, referring to Nvidia’s latest AI computing platform.
“The important thing is that the countries and the companies that we sell to recognize that diversion is not allowed, and everybody would like to continue to buy Nvidia technology. And so they monitor themselves, carefully,” Huang added.
During the trip, Huang announced Nvidia’s plans to sell more than 18,000 of its AI Blackwell to Saudi Arabia-based Humain to help power a data center project.
Nvidia saw its stock jump 16 percent last week, giving the chip manufacturer some relief as it navigates export controls. The company said last month the Trump administration's recent tightening of export controls on computer chips will cost the company $5.5 billion.
Push for AI dominance
Days ahead of the Middle East trip, the Commerce Department reinforced the administration’s pro-innovation stance when it reversed a Biden-era rule that would have placed caps on AI chips sales to all but 18 countries around the world. The rule “stifled American innovation,” the federal agency said, hinting a replacement rule would be issued.
Many tech companies — from Nvidia to Microsoft — and tech policy experts agreed the rule was overreaching and threatened the U.S.’s ability to compete on a global scale.
“It was too complicated, convoluted. It was too bureaucratic. It would have required a lot of effort on the part of us, agencies who just didn't have the resources to implement this thing and in an expedient manner,” said Matt Mittelsteadt, a technology policy research fellow at the Libertarian think tank Cato Institute.
“China ... if this rule was to be enforced, would have had a much freer hand to compete globally than American industries,” he added.
The Bureau of Industry and Security attempted to strike a balance in its rule rescission and issued new guidance, stating the use of Huawei Ascend chips anywhere in the world violates U.S. export controls. Huawei has close ties to the Chinese Communist Party.
AI ‘bargaining’ chips
The Gulf deals underscore the Trump administration's leveraging of AI infrastructure like chips and data center investments in bilateral agreements.
While these deals were not directly related to Trump’s trade war negotiations, experts suggested the administration could use the strategy in other tariff talks.
“They could want to use those as leverage to extract concessions from countries they might be negotiating with,” said Sam Winter-Levy, a fellow at the Carnegie Endowment for International Peace.
“And that could be tariffs reductions. You could link it to anything, and this administration generally really likes using leverage,” added Winter-Levy, whose research focuses on the intersection of national security and AI.
As the White House prepares to negotiate tariffs with various allied nations, technology observers are concerned guardrails will be ignored.
“And if you want to do this with dozens of countries at once,” Winter-Levy said, the government “does not have the capacity” to do so efficiently.
The U.S. could accidentally end up “turning off exports altogether or giving away a core strategic technology in exchange for concessions that may look good, but are actually not worth all that much,” he added.
The policy could backfire in the long run, experts warned.
“It could end up creating a race to the bottom, where every AI company faces pressure to move to the Gulf to compete, and you end up offshoring a key strategic technology away from the United States to a group of countries whose interests do not always align with ours,” Winter-Levy said.
“It’s definitely a concern that’s animating countries to look elsewhere. And where are they looking? China. And China, because of the US restrictions on exports to China itself, it needs alternatives,” Daniel Castro, vice president at the Information Technology and Innovation Foundation, told The Hill.
Read More Details
Finally We wish PressBee provided you with enough information of ( Trump walks 'geopolitical tightrope' in AI race )
Also on site :
- Foxconn Pours $1.5 Billion Into India As Apple Quietly Prepares To Shift iPhone Production Away From China Amid Growing U.S. Tariff Pressures And Supply Chain Challenges
- The Last of Us Creator Is Also Producing an Unannounced Game
- Nintendo Switch 2 GameChat Supports Live Subtitles and Text to Speech