Bloomberg: America is heading to enhance Saudi Arabia’s arrival to advanced artificial intelligence chips

The administration of US President Donald Trump is preparing to announce a deal that opens in front of Saudi Arabia a wider road to semiconductor, which paves the way for increasing the capacity of data centers in Saudi Arabia, despite the reservations expressed by some American officials regarding its relationship with China, according to sources familiar with the negotiations.

The deal will allow Saudi Arabia to purchase chips from companies such as “Invidia” and “Advanz Micro Device” (AMD), which is needed in training and operating artificial intelligence models, according to those sources that requested not to disclose its identity because the discussions are secret. Trump is scheduled to announce the agreement during his visit to Riyadh today, Tuesday, as part of a broader tour in the Middle East.

Initial understanding .. and ongoing discussions on the basic details
Although the two sides reached a preliminary understanding, they are still discussing basic details, according to the same sources. The most prominent of these details revolves around Washington’s concerns that China may reach these chips, whether by actually converting shipments or using their capabilities through cloud computing services. It is currently a clause that allows the American government to control access to data centers that use American chips, but it is not yet clear the conditions for this arrival or the parties concerned with it.

There was no immediate comment from the Saudi government or the White House on the issue.

The deal is one of two main agreements that the Trump team is negotiating with the Gulf states, coinciding with the administration’s efforts to reformulate the rules of advanced chips worldwide. Trump may declare the second agreement with the UAE later during his tour, according to Bloomberg’s reports.

These agreements indicate that Trump adopts a more open approach compared to President Joe Biden on exporting advanced American technology to the Gulf, a region that has a commercial interests for him, as well as the obligations of its sovereign funds by pumping significant investments in the United States.

“We must take strict steps to prevent illegal semiconductor semi -conductors to China. But this goal should not prevent legitimate sales for the rest of the world, as long as the partners are committed to reasonable safety conditions,” said David Sachs, White House Adviser, David Sachs, in a post on the X platform.

Since 2023, Washington has imposed a condition for a prior license to sell artificial intelligence chips to Saudi Arabia, the UAE and other countries in the region, due to concern about the possibility of this equipment to reach Beijing. Biden officials spent last year discussing the appropriate conditions for these sales, ensuring the protection of American technology from China without excluding the allies. In the context of these discussions, Saudi Arabia began negotiations with the Biden team to draft a bilateral agreement, but it stopped, as happened with the Emirates, after Trump’s victory in the presidential elections.

What are digital embassies?
Currently, Trump is working on his own version of this agreement. The talks also include the establishment of what is known as “digital embassies”, which are data centers that are excluded from the laws to protect local data and are placed instead to the laws of a foreign country, according to the sources.

This step aims to enhance an attractive environment for governments and the private sector to develop and adopt artificial intelligence technologies for peaceful purposes, according to a Saudi draft law on digital embassies. Although the law does not mention the agreement with the United States, it highlights the geographical location of Saudi Arabia and its ability to link 3 continents.

European countries, such as Estonia, adopt the model of digital embassies to operate their technical facilities outside their borders with the aim of reducing security risks. The idea also began to gain momentum in the Gulf, where the UAE company “G42” is studying the establishment of digital embassies in partnership with governments and building critical infrastructure.

“We are thinking about how this model is implemented, but of course it is very complicated,” said Kirill Evitimov, CEO of the G42 cloud computing unit. The group’s data centers unit plans, “Treasury”, to expand greatly in Saudi Arabia.