Introduction

The United States’ recent artificial intelligence partnerships with the United Arab Emirates (UAE) and Saudi Arabia (KSA) represent a significant new chapter in U.S. geopolitical and economic statecraft. These multibillion-dollar agreements aim to position major U.S. technology companies—spanning cloud infrastructure, semiconductors, and advanced artificial intelligence (AI) models—at the center of both Gulf nations’ AI ambitions.¹

The KSA and UAE partnerships also serve multiple U.S. objectives. Geopolitically, they align critical digital infrastructure in the Gulf with U.S. tech instead of Chinese alternatives, reinforcing U.S. influence in a region where China has made inroads.² Economically, they secure new markets for advanced semiconductors and cloud services—both critical U.S. exports—while unlocking Gulf investment capital for U.S.- led AI development.³ Strategically, the transactions potentially open a channel for the United States to influence the emerging international AI rules by embedding governance, technical safeguards, and normative alignment into the infrastructure layer of future AI ecosystems.

The Gulf partnerships are not with democracies, but they still present models for projecting democratic values into complex geopolitical environments. By incorporating transparency, accountability, security, and other mechanisms of responsible AI use into digital infrastructure, these initiatives have the potential to become durable models for U.S. AI partnerships. However, timing is critical. As China rapidly advances its own AI chip capabilities and expands its global cloud infrastructure, the window for establishing strong and strategically aligned partnerships in the Gulf and beyond may be narrowing faster than U.S. institutions and decision-making processes can adapt.^4*

Still, if implemented effectively, the UAE and KSA partnerships could serve as prototypes for future U.S. AI engagements, laying the groundwork for responsible U.S.-led AI development and governance without ceding ground to authoritarian alternatives. But success is not guaranteed. Without effective governance mechanisms and sustained U.S. leverage, these initiatives could devolve into U.S.-led AI diffusion in name only—technically American, but strategically unaligned and ultimately detrimental to U.S. interests.⁵

These concerns are particularly relevant given that the Saudi and Emirati AI developments are among the most concrete expressions to date of the Trump administration’s international AI strategy, articulated in two recently released documents: America’s AI Action Plan (the AI Action Plan) and the Executive Order on Promoting the Export of the American AI Technology Stack (the AI Export EO).⁶ But despite emerging policy clarity, significant gaps remain, including governance frameworks, oversight mechanisms, and approaches to AI sovereignty.

Translating the Saudi and Emirati transactions and other international AI projects into a durable competitive advantage will require bridging these gaps by formalizing governance and oversight mechanisms, integrating individual deals into a coherent, principled, and scalable international framework, and coordinating AI development and deployment with allies and partners.⁷

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^* Throughout this issue brief, the terms “chips,” “GPUs,” and “semiconductors” are used interchangeably to broadly denote specialized semiconductor chips optimized for parallel computation, particularly suited to AI workloads such as training and deploying AI models.

1. Alison Snyder and Dave Lawler, “Trump’s Gulf Gamble: Helping UAE and Saudi Become AI Powers,” Axios, May 18, 2025, https://www.axios.com/2025/05/18/trump-gulf-ai-deals-saudi-uae-security-china-risk.
2. Will Knight, “The Middle East Has Entered the AI Group Chat,” Wired, May 15, 2025, https://www.wired.com/story/trump-middle-east-artificial-intelligence-investments; Huawei, “Huawei Cloud in Saudi Arabia,” https://activity.huaweicloud.com/intl/en-us/saudi_arabia_region.html.
3. Semiconductor Industry Association, “SIA 2024 Factbook (2024),” https://www.semiconductors.org/wp-content/uploads/2024/05/SIA-2024-Factbook.pdf; Council of Economic Advisers, “What Drives the U.S. Services Trade Surplus? Growth in Digitally Enabled Services Exports,” The White House, June 10, 2024, https://bidenwhitehouse.archives.gov/cea/written-materials/2024/06/10/what-drives-the-u-s-services-trade-surplus-growth-in-digitally-enabled-services-exports/.
4. Huawei is reportedly making rapid progress with its Ascend 910C chips. See Anton Shilov, “DeepSeek Research Suggests Huawei’s Ascend 910C Delivers 60% of Nvidia H100 Inference Performance,” Tom’s Hardware, February 4, 2025, https://www.tomshardware.com/tech-industry/artificial-intelligence/deepseek-research-suggests-huaweis-ascend-910c-delivers-60-percent-nvidia-h100-inference-performance. Other Chinese firms also continue advancing AI chip development despite U.S. export controls. See Kyle Chan, Gregory Smith, Jimmy Goodrich et al., “Full Stack: China’s Evolving Industrial Policy for AI,” (RAND, June 26, 2025), https://www.rand.org/pubs/perspectives/PEA4012-1.html. Meanwhile, Chinese cloud companies are expanding across Southeast Asia and other parts of the world. See Debby Wu, “Alibaba Expands AI Cloud Services in Malaysia, Philippines,” Bloomberg, July 1, 2025, https://www.bloomberg.com/news/articles/2025-07-02/alibaba-expands-ai-cloud-services-in-malaysia-philippines.
5. President Trump recently announced at a press conference that export licenses for NVIDIA’s H20 and AMD’s MI308 AI chips to China would be approved on the condition that the companies pay a 15% revenue-share to the U.S. government. While this arrangement would likely generate revenue for the United States government, it exemplifies the risk of “pay-to-export” models: the dilution of U.S. strategic leverage and normalization of advanced technology transfers with limited governance oversight. See White House, “President Trump Holds a Press Conference, Aug. 11, 2025,” video, August 11, 2025, https://www.whitehouse.gov/videos/president-trump-holds-a-press-conference-aug-11-2025/; Associated Press, “US will get a 15% cut of Nvidia and AMD chip sales to China under a new, unusual agreement,” August 11, 2025, https://apnews.com/article/nvidia-amd-15-revenue-share-deal-c06e20d9c3418f1d0b1292891c4610c6.
6. Executive Office of the President, America’s AI Action Plan, (Washington, DC: The White House, July 23, 2025), https://www.whitehouse.gov/wp-content/uploads/2025/07/Americas-AI-Action-Plan.pdf; Exec. Order No. 14320, 90 FR 35393 (2025), https://www.whitehouse.gov/presidentialactions/2025/07/promoting-the-export-of-the-american-ai-technology-stack.
7. The Trump administration’s strategic intent behind exporting U.S. AI technology was recently articulated by Michael Kratsios, director for the White House Office of Science and Technology Policy, who stated, “We want the entire world to be running on an American artificial intelligence stack…our cloud, our chips, our algorithm, all of that needs to be exported and packaged to the world, so that we become the ecosystem of choice globally.” Stephanie Lai and Edward Ludlow, “Trump’s AI Plan Seeks to Have US Set Global Standard, Aides Say,” Bloomberg, July 24, 2025, https://www.bloomberg.com/news/articles/2025-07-24/trump-s-ai-plan-seeks-to-have-us-set-global-standard-aides-say. While this statement emphasizes strategic alignment, it also highlights the necessity for governance frameworks and compliance mechanisms, as discussed in this issue brief.