American chip giant Nvidia’s (NVDA) export deal with the UAE has been stalled for months as the White House awaits investment commitments from the country. According to a Wall Street Journal report, the delay has frustrated Nvidia CEO Jensen Huang and some White House officials, including AI Czar David Sacks. The deal was intended to support America’s strategy of boosting advanced chip exports while maintaining an edge over China in the AI race.
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In May, the UAE pledged to invest billions of dollars in the U.S. in exchange for access to Nvidia’s artificial intelligence (AI) chips. However, progress on the investment has been slow.
Nvidia’s Deal Faces Delays
Under the proposed arrangement, the UAE would invest billions of dollars in U.S.-based projects to build or finance data centers for training AI models. In return, Nvidia would export several billion dollars’ worth of advanced chips, with most of them going to U.S. companies operating in the Middle East.
The agreement depends largely on approval from Commerce Secretary Howard Lutnick. While some officials claim that he has not shown urgency in moving the deal forward, others argue he has not actively stalled it either. The White House remains cautious about national security risks due to the UAE’s close ties with China, raising concerns that the chips could indirectly benefit Chinese interests.
Nvidia will require the Commerce Department’s approval before shipping any chips to the UAE. Lutnick has reportedly pressured the Emiratis to finalize their U.S. investments before his department can authorize the delivery of the chips.
One of the officials stated that the UAE is considering a 1:1 investment structure, pledging to invest at least $1 billion in the U.S. and, in return, purchase a matching amount in Nvidia chips by the end of the year. However, some officials stated that the UAE must pay separately for the chips.
Nvidia Balances U.S. and China Demands
Huang continues to navigate a delicate balance between U.S. and Chinese markets, aiming to keep both reliant on its chips while avoiding any trade conflict. Nvidia is also working with Lutnick to secure licenses for chip exports to China. The government has demanded that Nvidia and peer AMD (AMD) give 15% of the chip sales to China to obtain licenses, which both companies have agreed to.
Is NVDA Stock a Buy, Hold, or Sell?
Despite the ongoing challenges, analysts remain highly optimistic about Nvidia’s long-term prospects. On TipRanks, NVDA stock has a Strong Buy consensus rating based on 35 Buys, two Holds, and one Sell rating. The average Nvidia price target of $213.61 implies 13.1% upside potential from current levels. Year-to-date, NVDA shares have surged nearly 41%.
