Nvidia Just Won Big in the Gulf -- And China's Watching

Nvidia NVDA shares climbed more than 3% to a record high after Washington approved several billion dollars' worth of AI chip exports to the United Arab Emirates. The licenses, issued by the Commerce Department's Bureau of Industry and Security, mark the first permits granted under President Donald Trump and signal the start of a new chapter in U.S.UAE tech relations. This approval follows a landmark May accord in which the UAE agreed to match U.S. chip exports with reciprocal investment on American soil a dollar-for-dollar partnership designed to strengthen both economies.

At the center of the agreement lies a five-gigawatt data center project in Abu Dhabi, with OpenAI as its anchor tenant and plans for up to 500,000 U.S. AI chips shipped annually. About a fifth of that supply is slated for local AI firm G42, though its allocation is still pending. Under the terms, Emirati capital will flow into U.S. AI infrastructure just as American chips fuel the Gulf's data ambitions a two-way corridor of investment and influence. Officials have not disclosed the exact scale of the initial exports but emphasized that further approvals will hinge on how quickly the UAE translates its $1.4 trillion U.S. investment pledge into concrete projects.

For Trump's administration, the move is both economic and geopolitical. White House AI czar David Sacks said the strategy boxes China out of the Middle East, framing it as a decisive pivot from the previous administration's more cautious stance. By conditioning future chip access on U.S.-run data centers, Washington is asserting tighter control over how advanced semiconductors are deployed abroad. In effect, the deal positions America through Nvidia's technology as the primary architect of the Gulf's AI infrastructure, signaling that the next wave of digital power in the region could be built on U.S. silicon and American oversight.