The Trump administration is finalizing a groundbreaking agreement that will allow Saudi Arabia broader access to advanced semiconductors for artificial intelligence development. This strategic decision aims to support the construction of data centers in the Gulf region, despite concerns from some US officials regarding the country’s ties to China. The deal is expected to be announced during President Trump’s current visit to Riyadh, where he is beginning his broader Middle East tour.
Key Points of the Agreement
- Saudi Arabia will gain the ability to purchase cutting-edge chips from companies like Nvidia and Advanced Micro Devices, considered the gold standard for training and operating artificial intelligence models
- The agreement could be announced during Trump’s current visit to Riyadh, although both governments are still finalizing several key details
- The US plans to control access to data centers using American chips, with precise access conditions still under negotiation
- A similar agreement is being prepared with the United Arab Emirates, which could be announced later during Trump’s trip
- AMD and Nvidia stocks showed positive market reactions following leaks about the impending deal
Strategic Background and Security Measures
The Trump administration is taking a significantly more open approach to exporting advanced technologies to Gulf countries compared to the previous Biden administration. This approach reflects not only a shift in foreign policy but also US business interests in the region, where sovereign wealth funds have pledged substantial investments in the American economy.
David Sacks, White House AI Advisor, recently stated: “We must take aggressive steps to prevent advanced semiconductors from being illegally diverted into China. But that goal should not preclude legitimate sales to the rest of the world as long as partners comply with reasonable security conditions.”
Since 2023, Washington has required special licenses for AI chip sales to the UAE, Saudi Arabia, and other Middle Eastern countries, primarily due to concerns that this equipment could end up in Beijing’s hands. Biden officials spent much of last year debating the conditions for these shipments, aiming to protect American technologies from China without being so restrictive that third countries would completely turn away from American hardware.
Innovative Data Embassy Solutions
The negotiations also include the pioneering concept of “data embassies,” where data centers could be exempt from local data protection regulations and instead be subject to the laws of a foreign state. The aim of this provision is to help Saudi Arabia create “an attractive environment for foreign governments and private sector entities to develop and adopt such technologies for peaceful purposes and uses.”
A draft law, which does not explicitly mention the agreement with the US, emphasizes Saudi Arabia’s strategic geographical position and its ability to connect three continents. This advantage could be crucial for the future development of global digital infrastructure.
Some European countries, such as Estonia, already use similar digital embassies to operate government IT facilities in other countries, providing additional protection against security risks. This innovative concept is gaining popularity throughout the Gulf region and could represent a new standard in international digital cooperation.
G42, a major AI player from Abu Dhabi, is actively exploring options for establishing digital embassies through government partnerships and for backing up critical infrastructure. Kiril Evtimov, CEO of the cloud division Core42, said in an April interview: “We’re thinking about how to implement this, but as you can imagine, this is fairly complex.” The company’s data center, Khazna, has also announced plans for aggressive expansion in Saudi Arabia, indicating growing technological cooperation in the region.
