Dem
47
GOP
53
Even under the best of conditions, the Middle East is a nest of vipers, where your friends are also your enemies. Case in point: the United Arab Emirates. This is a federation of seven hereditary absolute monarchies, where political parties are banned, there is no parliament, and dissent is not tolerated. It is nominally America's friend but also a close ally and trading partner with China.
Two weeks ago, the U.S. Department of Commerce loosened restrictions on selling sensitive tech exports to the U.A.E. Commerce staffers whose mission is to keep critical tech from adversaries were surprised (well, maybe "appalled" would be a better word) by the decision, which apparently came from higher up. Senior officials in the DoC have opposed this for years because the U.A.E. has no need for top-of-the-line AI chips—other than making a lot of money marking them up and selling them to China for a windfall profit. One inside source told Politico: "It is an open secret that the U.A.E. is the primary diversion point for sensitive U.S. technologies in the Middle East—by orders of magnitude." There were multiple internal reports within Commerce warning of the security dangers. One former Commerce official said: "There was a sense even as we were doing [the reports] that it was already a foregone conclusion and we were just sort of spitting in the wind."
Last year, the DOC, which is run by Donald Trump's good buddy Howard Lutnick, agreed to sell the U.A.E. 35,000 of Nvidia's most advanced chips. The new move includes advanced chips, but also military equipment, satellite components and parts used in nuclear reactors. This is one of the most consequential foreign policy decisions in years, and it is hard to see how it benefits Americans, other than perhaps some who knew about it in advance and could load up early on the stocks of the companies making the equipment to be sold.
Much of the tech will be sold to an Abu Dhabi-based company, G42, that is involved with AI infrastructure and cloud computing. It is run by Peng Xiao, a Chinese-born American executive who renounced his U.S. citizenship to become an Emirati national. Other top G42 staffers also have close ties with China and Chinese tech companies, The whole thing has been a giant red flag for years and previous presidents have carefully avoided handing critical U.S. tech to the U.A.E. Now Trump has discarded that and eagerly wants to do business with the U.A.E., none of whose leaders are known for their morality or scruples.
Why the huge change in U.S. policy after so many years of refusing sell critical tech and military equipment to the U.A.E.? We have no idea. We do know, however, That Trump's sons and Steve Witkoff created a company called World Liberty Financial. It created and issues a crypto coin and provides a platform for people to buy and sell the coins (for a fee). The company has no actual assets (other than the coins it creates itself) and has no products or services other than the self-created coins and running a market for them. Nevertheless, a shrewd Emirati investor, Sheikh Tahnoon bin Zayed Al Nahyan, bought 49% of World Liberty Financial for $500 million a few days before Trump's 2025 inauguration. All of that money flowed directly to the people who created the company and who own the stock in it. In a funny coincidence, Tahnoon is chairman of G42. In another funny coincidence, he is the brother of the U.A.E.'s president.
Sen. Elizabeth Warren (D-MA) is a bit skeptical. She said:
It reeks of corruption. The UAE secretly buys a 49 percent stake in Donald Trump's crypto business. Then the UAE gets access to chips that the U.S.' own security people say should not be given to the UAE. What does the UAE plan to do with those chips? The concern of our own security people is that they end up in China and help advance Chinese weapons systems that will be used against the U.S.
The Senator is such a worrywart.
Oh, and in another complete coincidence, earlier this spring Trump said that the U.A.E. would invest $1.4 trillion in the U.S. Trump probably is thinking of them building a few factories in red states that will employ a few hundred people each and then Trump can brag about his job-creation powers. But the U.A.E. might well have a different idea of what investing $1.4 trillion in the U.S. means. For example, it could buy Mastercard for $470 billion and Visa for $670 billion with $260 billion left over for other deals. Then it would have a vast trove of data about almost all Americans and their finances. Surely that would be valuable. With the other $260 billion, the U.A.E. could buy Wells Fargo Bank, Qualcomm, Verizon or Boeing. (V)