Nvidia Stock Surges on US Approval of Chip Sales to UAE

Microsoft confirmed Monday that it has secured U.S. export licenses to ship Nvidia chips to the United Arab Emirates (UAE), a move poised to significantly boost the Gulf nation’s ambitions in the artificial intelligence (AI) sector. The approval, granted by the U.S. Commerce Department in September, comes amid heightened scrutiny over the export of advanced technologies.

Microsoft indicated that it’s the first company to receive such licenses under President Trump’s administration for this specific purpose, adding that the approval was based on “updated and stringent technology safeguards.” These safeguards likely involve measures to prevent unauthorized access or reverse engineering of the technology, reflecting ongoing concerns about intellectual property protection and potential misuse.

The licenses will allow Microsoft to ship the equivalent of 60,400 A100 chips, potentially even including Nvidia’s next-generation GB300 GPUs. This access to advanced computing power is critical for the UAE as it seeks to develop and deploy cutting-edge AI applications across various industries.

“While the chips are powerful and the numbers are large, more important is their positive impact across the UAE,” Microsoft said in a blog post. “We’re using these GPUs to provide access to advanced AI models from OpenAI, Anthropic, open-source providers, and Microsoft itself.” This statement underscores the broader impact of the agreement, indicating plans to democratize access to AI development tools and models within the UAE.

The announcement provided a modest boost to both companies on Monday. Nvidia shares saw a 3% rise, while Microsoft stock experienced a slight increase.

Azad Zangana, head of GCC macroeconomic analysis at Oxford Economics, highlighted the significance of Nvidia’s chips for the UAE’s AI strategy. “Access to the world’s leading AI chips provides the hardware that will give developers the leading edge that is needed in an incredibly competitive global landscape,” Zangana wrote, emphasizing the strategic importance of access to high-performance computing resources for competing in the global AI market.

Speaking at the ADIPEC conference in Abu Dhabi, Microsoft President Brad Smith emphasized the importance of the long-standing relationship between the UAE and U.S. governments.

“We’re very grateful to the Secretary of Commerce Howard Lutnick, and the work that he has championed to enable export licenses to be made available to us,” Smith said. “That builds as well on the relationships we had with Secretary [Marco] Rubio when he was in the Senate and Democrats as well. [It] takes two parties to govern, and we keep that in mind.” Smith’s remarks highlight the bipartisan support for strengthening ties with the UAE through technological partnerships.

Microsoft further solidified its commitment to the UAE by announcing an increase in its total investment to $15.2 billion by the end of the decade. This substantial investment encompasses a broad range of initiatives aimed at fostering technological innovation and economic growth in the region.

This includes $1.5 billion equity investment in AI firm G42 and more than $5.5 billion in capital expenses for the expansion of Microsoft’s AI and cloud infrastructure projects in the region. The investment in G42, a leading UAE-based AI company, signals Microsoft’s intention to collaborate on groundbreaking AI projects and further integrate its technologies into the local ecosystem.

“We’re really investing in trust, and I think it’s that combination of technology, talent and trust that you’re seeing come together here in the UAE, around AI, around technology, but really the future of the whole economy,” Smith said. This quote underscores the importance of establishing trust and fostering collaboration as keys to unlocking the full potential of AI and driving economic transformation in the UAE.