US-UAE Nvidia Deal Hinges on Security Guarantees

The US and UAE Nvidia deal is facing a security roadblock as US Commerce Department officials withhold approval for shipments of Nvidia AI chips to the UAE. The hold-up is due to concerns that Chinese firm G42, which is slated to receive 20% of the chips, may provide indirect access to Nvidia's advanced semiconductors. G42 has agreed to divest from Chinese partners and build data centers in the US, but negotiations continue on tighter oversight and revised deal language. Investors and industry watchers await license approvals and statements from key players like Nvidia CEO Jensen Huang.

The landmark agreement to supply the United Arab Emirates with advanced artificial intelligence chips from Nvidia (NASDAQ:NVDA) is facing significant hurdles as U.S. Commerce Department officials delay approval for shipments. The delay is primarily due to concerns that Chinese firm G42, which is slated to receive 20% of the chips, may provide indirect access to Nvidia's advanced semiconductors [2].

The U.S. administration has expressed worries that China could gain access to cutting-edge U.S. technology through G42, which is based in Abu Dhabi. Despite assurances from G42 that it has agreed to divest from Chinese partners and build data centers in the U.S., negotiations are ongoing to tighten oversight and revise the deal language [2].

U.S. Commerce Secretary Howard Lutnick remains optimistic about the deal but has not yet approved direct chip shipments to G42. The delay has frustrated tech executives and divided U.S. policymakers, with some worrying that competitors like Huawei could fill the gap if the deal collapses [2].

Nvidia's CEO, Jensen Huang, has emphasized the importance of the deal to President Donald Trump. However, the White House has not yet responded to requests for comment on the matter [1]. Huang has also sold a significant portion of his shares recently, as part of a 10b5-1 plan adopted in March, raising questions among investors [3].

Investors and industry watchers are closely monitoring the situation, awaiting license approvals and statements from key players. The delay could potentially impact Nvidia's upcoming second-quarter results, scheduled for mid-August. The company's ability to secure export approvals and ramp up shipments could materially influence its performance in the world's largest AI market [3].

References:
[1] https://finance.yahoo.com/news/market-chatter-us-officials-delay-102212456.html
[2] https://www.investing.com/news/stock-market-news/us-officials-stall-uaenvidia-chip-deal-over-security-concerns-wsj-reports-4138685
[3] https://finance.yahoo.com/news/insider-alert-nvidia-ceo-jensen-014505102.html