The massive AI deal between the U.S. and the United Arab Emirates (UAE) is reportedly on hold before it can be finalized due to national security reasons.
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, the Wall Street Journal reported, citing anonymous sources.
This potential chip smuggling was a concern when the deal was initially formed, according to the Wall Street Journal, but officials from the UAE and Saudi Arabia assured the U.S. they had safeguards in place.
Smuggling chips to China has become more of a concern in recent months.
The Trump administration is rumored to be considering imposing chip export restrictions on Thailand and Malaysia as well to curb potential smuggling. Malaysia on Monday introduced an export permit requirement for U.S. AI chips.
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