According to a report by the American Consumer News & Business Media (CNBC) on July 10, the U.S. Department of Commerce took steps to loosen export controls over the UAE on Friday. This included stating that it would ‘actively review’ the export licensing applications for MGX. MGX is an investment company supported by the UAE.
In a 17-page draft regulation that is not yet published and can be found in the Federal Register, it is mentioned that the Bureau of Industry and Security will actively review applications related to MGX semiconductor products and those shipped to servers in the UAE.
MGX is an investor supporter of OpenAI and Anthropic, both leading AI companies.
This broader rule also grants the UAE government, Abu Dhabi AI Group G42, and their cloud computing subsidiary Core42 the right to be exempt from certain advanced computing device licenses.
Massachusetts Democratic Sen. Elizabeth Warren criticized the new rule, saying, “Today, Trump’s Department of Commerce is granting G42 the authority to obtain advanced AI chips without any permits, and it is also promised preferential treatment for MGX. Meanwhile, there have been reports that there is concern that sensitive technologies might be transferred to China, as well as other national security risks.”
She demanded that Howard Lutnick, Secretary of Commerce, and Jeffrey Kessler, Deputy Assistant Secretary of Industry and Security, testify before Congress, "explaining how this transaction could endanger American national security."
According to the new rules, certain regulated devices used in operations and data center projects of Amazon, Apple, Google, Meta, Microsoft, OpenAI, Oracle, and xAI in the UAE will receive simplified approval procedures.
Reports say that these adjustments may speed up the sales of chips by reducing the need for separate export licenses, but they do not eliminate the regulatory measures aimed at preventing sensitive technologies from flowing to restricted users or countries like China.
In May last year, The Wall Street Journal cited sources familiar with the matter, stating that the U.S. government changed its mind due to concerns about advanced semiconductors flowing into China. As a result, the U.S. government blocked the UAE from purchasing NVIDIA's AI chips.
Many American officials are worried that Chinese technology companies that attempt to sell chips in the Middle East might take advantage of this blocked transaction to gain an opportunity. For example, David Sacks, the White House official in charge of artificial intelligence and cryptocurrency matters.
He questioned, "I don’t quite understand why this causes controversy in Washington. In places like the Gulf states, one has to choose between American technology or Chinese technology."
"If we don't allow these countries to purchase American technology, it would be pushing them toward China's embrace. Many people say 'Chinese tech exports need to wait for a few years,' but recent reports show that Chinese companies are already promoting chips abroad." He added, "Therefore, we can’t shackle American businesses' hands."
The Chinese Ministry of Foreign Affairs has repeatedly emphasized that it opposes the politicization, instrumentalization, and weaponization of science, technology, and economic issues. Its stance in opposing malicious blockade and suppression of China is consistent and clear. Such practices disrupt the stability of the global industrial chain and do not serve the interests of either side.
