Nvidia (NASDAQ: NVDA) experienced a significant rise of more than 4.5% in early trading as the Trump administration considers a significant policy change aimed at relaxing restrictions on American exports of advanced artificial intelligence processors to the United Arab Emirates. Sources suggest this could lead to a chip agreement that President Trump may announce during his upcoming visit to the Middle East from May 13 to 16.
According to Bloomberg, advisors at the White House have raised questions about why the UAE, although one of the 17 countries plus Taiwan permitted unlimited AI chip exports under the AI Diffusion Rule established on January 7, is facing stricter limitations compared to about 120 other countries that are only permitted capped volumes.
Under the existing regulations, four nations—China, Russia, Iran, and North Korea—are completely prohibited from obtaining high-end Nvidia accelerators like the H100 and A100. This situation has led to calls for a revision of the policy before Trump’s trip; an Nvidia representative did not provide comments when approached by Reuters.
The potential policy alteration is a result of vigorous lobbying by Nvidia’s CEO, Jensen Huang, who argued that the AI Diffusion Rule is unprecedented and counterproductive due to its potential to hinder global innovation and economic growth. Additionally, UAE national security advisor Sheikh Tahnoon bin Zayed Al Nahyan has been advocating for greater access to AI accelerators during private discussions in Washington.
Sources from Bloomberg indicate that the administration might introduce a formal framework for chip transfers during Trump’s visit to Abu Dhabi. This visit is significant as the UAE has pledged to invest $1.4 trillion in various U.S. sectors—including semiconductors, AI infrastructure, and manufacturing—over the next decade, which remains a key topic in the discussions between the two nations.
Alleviating export restrictions could unlock a wider market in the Gulf region and support Nvidia’s growth at a time when geopolitical tensions and tier-two restrictions are jeopardizing supply chains and affecting valuation multiples. Investors should be on alert for formal guidance regarding allowable chip volumes and any announcements concerning bilateral revenue targets following the expected announcement.
Market observers will be keenly interested in Trump’s engagements in Abu Dhabi from May 13 to 16, as they anticipate the official confirmation of any U.S.-UAE chip agreement and its potential impact on NVDA’s presence in the global market.