The U.S. government is ‘preparing’ to announce a deal with Saudi Arabia, which provides the latter more access to advanced semiconductors, reported Bloomberg on Tuesday, citing sources familiar with the matter.
This would improve Saudi Arabia’s access to chips from companies like NVIDIA, AMD, and more to aid its booming artificial intelligence ecosystem. On Monday, Humain, an AI venture chaired by Crown Prince Mohammed bin Salman, was launched. The $940 billion Public Investment Fund (PIF) supports the development of AI models, infrastructure, data centres, and more.
“The company will also offer one of the world’s most powerful multimodal Arabic large language models (LLMs),” read the announcement from PIF.
United States President Donald Trump is currently in Riyadh, Saudi Arabia, and the deal could be announced ‘as soon as this week.’
However, the report also suggested that the United States is ‘concerned’ about whether China could access the chips sent to Saudi Arabia. This likely stems from earlier reports in which China was accused of illegally acquiring restricted chips through Malaysia and various other indirect methods.
The United States government has restricted the export of high-end AI chips from American companies to other countries. Former President Joe Biden also imposed these restrictions.
In January, Biden introduced the ‘Framework for Artificial Intelligence Diffusion’, which categorises nations into three levels according to the security threats they pose to the U.S. These categories dictate the application of export controls.
The first category encompasses 17 countries plus Taiwan, all of which can acquire unlimited AI chips. The second category includes approximately 120 countries, such as Saudi Arabia, where access to chips is restricted.
Exports to the third category, which includes countries like China, Russia, Iran, and North Korea, are severely restricted.
Companies can import up to 1,700 GPUs, valued at around $40-50 million, without needing a licence, to countries classified in the ‘Tier 2’ bracket. Larger imports, worth up to $1 billion, will require a licence review.
However, Bloomberg reported that the Trump administration plans to remove the tier-based system to control exports.
“The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation,” the Commerce spokeswoman said. “We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance,” she added.
Changes to the rule may be announced as early as Thursday, added the report.
