US Middle East AI Splurge. A Bold Move But Also A Curious Affair

President Trump’s whirlwind tour of the Middle East last week brought with it a plethora of announcements, deals, MOUs etc. His entourage included a who’s who of US tech CEOs, albeit with a couple of notable absences. This YouTube video captures the bulk of the announcements and you can find a deep dive on the implications for US-related AI interests from SemiAnalysis here.

AMD & NVIDIA were the two most obvious winners in terms of deals struck, but there were also hopeful signs of deals in the offing for Qualcomm and Cisco. More on these anon. Rather quickly, the focus on last week’s events switched from the deals themselves to a broader geopolitical debate about the wisdom of having leading US AI companies broadly deploying their leading edge technology AI across the Middle East. This concern was counterbalanced by the positioning of the move as being a scoop on the part of the US administration, getting their AI technology embedded in the Middle East ahead of rival technologies from China.

Setting the stage for the events that were to unfold last week as the announcement by the US authorities that the AI Diffusion Rule .introduced by the former administration, was to be scrapped, details here.

The AI Diffusion Rule was issued on January 15, 2025, with compliance requirements that were set to come into effect on May 15, 2025. These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements. The AI Diffusion Rule also would have undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status.

BIS plans to publish a regulation formalizing the rescission and will issue a replacement rule in the future.

Under Secretary of Commerce for Industry and Security Jeffery Kessler has instructed BIS enforcement officials not to enforce the Biden Administration’s AI Diffusion Rule, stating:

“The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries. At the same time, we reject the Biden Administration’s attempt to impose its own ill-conceived and counterproductive AI policies on the American people.”

The press release heralding the rescission of the AI Diffusion Rule was accompanied by three further announcements, billed as “actions to strengthen export controls for overseas AI chips”

#1 Issuing guidance alerting industry to the risks of using PRC advanced computing ICs, including specific Huawei Ascend chips.

#2 Issuing guidance warning the public about the potential consequences of allowing U.S. AI chips to be used for training and inference of Chinese AI models.

#3 Issuing guidance to U.S. companies on how to protect supply chains against diversion tactics.

To fully comprehend the significance of last week’s events in the Middle East, it’s necessary to take a step back and look at the concerns that US authorities were grappling with just last year in relation to G42, the UAE based AI technology company founded in 2018. Those concerns, and the mitigations negotiated around them, are well described here:

You may recall that Microsoft has been engaging extensively with G42 in recent years and even went so far as to take a $1.5 billion stake in the company almost exactly one year ago, details here.

You likely also recall that G42 has established a strong partnership with US AI accelerator startup Cerebras. We’ve written about that relationship on a number of occasions, most recently here:

Despite theses long established partnerships, neither Microsoft or Cerebras featured in any of the events of last week. Furthermore, while the US Administration announced a “Framework on Advanced Technology Cooperation” with the UAE, details here, no such Framework was agreed with either Saudi Arabia or Qatar, the other two destinations on last week’s Middle East tour.

What does all this mean and what are the implications for the two big winners from last week’s events, AMD & NVIDIA? Let’s dig in…