the next battleground in the tech war between the US and China. Just over a month ago, leading US technology firm Nvidia announced that the US government was restricting the export of its most advanced computer chips to “some Middle Eastern countries.” While the specific countries were not disclosed, experts speculate that Iran, Saudi Arabia, the UAE, Qatar, and Israel could be potential targets.
The US has been attempting to get ahead of China in the development of artificial intelligence (AI) technology, as it recognizes the importance of AI in shaping the future. In a bid to slow down Chinese progress, the US has been restricting Chinese access to the computer chips necessary for advanced AI models. These chips are predominantly produced by US-based companies, with Nvidia being the world leader in chip manufacturing.
The export restrictions on chips to China and Russia were announced last year by the US Department of Commerce. The recent announcement by Nvidia adds another layer to these restrictions. The US government cited concerns of AI-enabling chips being used for military modernization and human rights abuses as the reason behind the export controls.
The Middle Eastern countries impacted by these export restrictions are likely those that have been heavily investing in AI technology. The oil-rich Gulf states, such as Saudi Arabia, the UAE, and Qatar, view the digital transformation of their economies as crucial for diversifying away from oil dependence. Israel is also a major player in AI development, with several advanced chipmakers already operating in the country. Nvidia’s acquisition of an Israeli company in 2020 further underscores its presence in the region.
The US aims to control chip exports into the Middle East due to concerns that Chinese firms might use these countries as a means to evade restrictions and acquire access to advanced chips. Chinese tech investments in the region have been deliberate and targeted, aligning with China’s political agenda. According to a study by the Center for Emerging Technologies, Chinese military purchases of AI-enabling chips often involve intermediaries and shell companies.
The relationship between the Middle Eastern countries and China raises the possibility of leakage in chip trade. Saudi Arabia and the UAE have been strengthening their tech and scientific cooperation with China over the past few years, and Chinese presence in Gulf nations is becoming more prominent. Researchers have noted that personal links formed at institutions like the King Abdullah University of Science and Technology in Saudi Arabia have contributed to the growing cooperation between the Gulf states and China.
Similarly, the UAE has established a Ministry of Artificial Intelligence and developed its own advanced AI model. The country’s reputation regarding adherence to international sanctions has come under scrutiny, particularly in relation to its potential trade with Russia. The US is concerned about the exposure of Nvidia chips to espionage or reverse-engineering, given China and Russia’s increased presence in Gulf nations.
Israel also has deepening ties with China, leading some to question its position in the context of US export restrictions. While Israel’s close relations with China and Russia may not align entirely with US interests, the country still maintains an extremely close alliance with the US, especially in defense technology.
The export restrictions imposed by the US are not solely politically motivated but also influenced by concerns about human rights abuses. The US and its allies prioritize “Democratic AI” and are wary of authoritarian states using AI for repression. However, experts do not believe that the restrictions are a means of political pressure on the Middle Eastern countries involved in major deals, such as the Saudi-US defense pact or Saudi-Israel normalization.
Instead, these export controls can be seen as a message to Gulf partners about the seriousness with which the US views technology competition with China. The long-term impact of these controls on relations between democracies and autocracies will be important to track, especially in the context of emerging technology.
AI has the potential to revolutionize industries and economies worldwide, making it a critical technology for countries to develop. The tech war between the US and China has now extended to the Middle East, as both nations seek dominance in AI development and production. The export restrictions on advanced chips highlight the importance of these components and the role they play in shaping the future of AI.