In response to worries that Middle Eastern countries could be redirecting AI accelerators and sensitive tech to China, the US government is contemplating restrictions on chip exports to certain nations in the region. This follows a Bloomberg report that some officials have recently supported the idea, although no formal plans have been set.

The US Commerce Department, when asked for a comment on these developments, had no immediate response. Since 2023, exports of such technology have been restricted to prevent resale to China, and securing export licenses has become more challenging. The Biden administration might further tighten these controls, particularly impacting AI initiatives in countries like Saudi Arabia and the UAE, both keen on advancing their AI sectors with American technology.

Further complications arise for the UAE, which has already severed some ties with Chinese partners to avoid US scrutiny. In addition to hardware export difficulties, the capability to access cloud-based AI computing is less hindered, as shown by deals like that of UAE AI firm G42 funding wafer-scale supercomputers by Cerebras.

Apart from AI chips, ASML’s stock price sharply declined after reporting lower expectations, partly due to reduced Chinese orders under US restrictions.

The economic fallout of these geopolitical maneuvers highlights the complex interdependencies of tech trade amid global power plays.