US sets new rule that could spur AI chip shipments to the Middle East By Reuters

Written by Karen Freifeld

WASHINGTON (Reuters) – The U.S. Commerce Department on Monday unveiled a rule that could facilitate shipments of artificial intelligence chips to data centers in the Middle East.

Since October 2023, US exporters have been required to obtain licenses before shipping advanced chips to parts of the Middle East and Central Asia.

Under the new rule, data centers will be able to apply for certified end-user status which will allow them to receive chips under a general license, rather than requiring their US suppliers to obtain individual licenses to ship to them.

A US official said the United States will work with foreign data centers that apply for the Certified End User Program as well as host governments to ensure the safety and security of the technology.

The move comes amid growing concerns in Washington that the Middle East could become a conduit for China to obtain advanced American chips that are prohibited from being shipped directly to China.

G42, a UAE-based artificial intelligence company with historical ties to China, has been the focus of these concerns. In April, Microsoft (NASDAQ:) announced that it would invest $1.5 billion in the company, and that it planned to equip the G42 with chips and model weights, which is cutting-edge data that improves an AI model’s ability to mimic human reasoning.

The deal has drawn scrutiny from Chinese hardliners in Congress, although the G42 said in February that it was withdrawing from China and accepting restrictions imposed by the United States on working with American companies.

G42, which owns the data centers, did not immediately respond to a request for comment.

The Commerce Department said in a statement that data centers that apply for the program will undergo a rigorous review process to ensure that safeguards are in place to prevent American technology from being diverted or used in ways that conflict with national security.

The agency’s Office of Industry and Security is “committed to facilitating international AI development while mitigating risks to U.S. and global security,” Alan Estevez, a trade official, said in the statement.