Center on Global Energy Policy
Excerpts below, read entirely at link above
Many analysts expecting President Donald Trump’s first foreign trip to yield breakthrough deals on Iran or Gaza may have found his recent four-day jaunt through Saudi Arabia, Qatar, and the United Arab Emirates somewhat underwhelming. But the commercial deals Trump struck on artificial intelligence cooperation will likely shift the global balance of power for one of this century’s most critical technologies. It’s just not clear yet in whose favor.
The Biden and Trump administrations have
both been very clear about the importance of winning the global race for AI supremacy.The Biden administration’s approach to AI dominance was to provide financial support through the $280 billion CHIPS and Science Act and then largely play defense with regulation while trusting US companies to outcompete overseas rivals. These regulations included multiple rounds of semiconductor export controls, a broader “AI diffusion” framework that capped chip sales to most countries (including Saudi Arabia, Qatar, and the UAE), and expanded use of foreign investment screening, including the first-ever regulations on US investment in Chinese AI and semiconductor companies. The Biden administration bet that while these regulations may frustrate some American companies, they would prove a greater drag on the United States’ adversaries and thus preserve the country’s AI head start.The Trump team feels strongly that these defensive controls undermine the United States’ ability to compete overseas by capping American companies’ revenues and market share. NVIDIA earned just $17 billion in China over the last year compared to more than $61 billion in the United States, a disparity that is largely due to US export controls. Leading American semiconductor tooling company Applied Materials, meanwhile, saw its revenue share from China fall from 43 percent to 25 percent over the last year while overall revenue grew just 6 percent. This is revenue that, according to NVIDIA CEO Jensen Huang, could have been reinvested into jobs and innovation in the United States.
The new administration has therefore opted to flip the Biden premise on its head by revoking the AI diffusion rule and announcing the sale of hundreds of thousands of cutting-edge chips to the Saudis and Emiratis, in addition to committing to build the world’s largest AI data center outside the United States in Abu Dhabi. It is gambling that enabling American companies to directly compete against Chinese rivals in the Gulf and beyond will generate sufficient revenue and innovation rewards to offset the increased risk of cutting-edge technology falling into the hands of US adversaries.
It is not clear which approach is right. But Trump’s “all gas, no brakes” approach is high-risk, high-reward,
and almost impossible to reverse: once cutting-edge US AI hardware and software are sitting in a foreign data center or on a foreign server, adversaries can more easily target and acquire them.White House AI czar David Sacks dismissed these concerns while in Riyadh, saying there is “not a risk” of our cutting-edge technology falling into the wrong hands via “a friend like Saudi Arabia.”
The Trump administration has left open the real possibility of espionage being engaged in by adversaries in order to acquire the technology. Interesting.
Another 6 paragraphs to read at the link- And they should be read!