Nvidia’s AI Chip Deal on Hold

Nvidia Corp. (NASDAQ: NVDA) is facing fresh geopolitical turbulence as its multi-billion-dollar agreement to supply AI chips to the United Arab Emirates (UAE) has been delayed. The stall has reportedly frustrated Nvidia CEO Jensen Huang and several White House officials who viewed the deal as crucial to U.S. AI leadership.

Geopolitical and Regulatory Hurdles

The deal was struck in May 2025 during President Donald Trump’s state visit to the Middle East.
The agreement required the UAE to purchase thousands of Nvidia AI chips annually and match every $1 billion purchase with $1 billion investment in the U.S.
U.S. Commerce Secretary Howard Lutnick is withholding approval, demanding the UAE finalize its U.S. investments first.
Lutnick also flagged the UAE’s close ties with China as a national security risk, complicating chip exports.

Nvidia’s Broader Challenges

Nvidia is already contending with the White House’s chip export curbs to China, which blocked sales of its H20 China-specific AI chips.
Its Q3 guidance excluded China contributions, reflecting uncertainty on sales resumption.
Despite headwinds, Nvidia’s stock is up over 40% in 2025.
Retail sentiment on Stocktwits remains neutral (47/100), with normal message volume.

Strategic Importance of the Deal

White House AI Czar David Sacks saw the deal as pivotal to maintaining U.S. AI dominance and countering China.
Both Sacks and Huang expected the agreement to cement U.S. leadership in AI chip exports.
The delay is now a setback for the Trump administration’s tech export strategy.