On Thursday, Senate Minority Leader Chuck Schumer (D-N.Y.) warned that President Donald Trump's support for exporting sensitive U.S. artificial intelligence chip technology to Persian Gulf allies could benefit China.
What Happened: On the Senate floor, Schumer criticized Trump for greenlighting high-stakes deals allowing advanced U.S. chips to be sold to Saudi Arabia and the UAE, reported The Hill.
"This deal could very well be dangerous because we have no clarity on how the Saudis and Emiratis will prevent the Chinese Communist Party, the Chinese government, the Chinese manufacturing establishment from getting their hands on these chips," Schumer said.
He warned that "inevitably, when foreign countries end up with American-made chips, the CCP, the Chinese Communist Party, sooner or later gets hold of these American chips and their secrets in them."
See Also: Elon Musk Says Will Come As A ';Surprise To Most' As China's Economy Surpasses US And EU Amid Rising Tariffs And Growing Recession Fears
Several U.S. tech firms -- including Nvidia Corporation (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD) and Qualcomm Inc. (NASDAQ:QCOM) -- have announced major AI chip agreements with Gulf-backed entities during Trump's Middle East trip.
Nvidia alone plans to deliver 18,000 Blackwell chips to a Saudi sovereign wealth fund-backed company.
Why It's Important: Over the years, the U.S. government has imposed tight export restrictions on advanced chips over fears they could be used for military or surveillance purposes by adversaries like China.
Schumer said these new deals undermine those efforts and could shift cutting-edge manufacturing abroad.
"What's this about bringing jobs and high-end technology back to the country?" Schumer asked. "All of a sudden it's OK to give it to other countries? Especially other countries whose security might not be as tight as ours?"
Previously, Nvidia CEO Jensen Huang cautioned that restricting access to China’s AI market could negatively impact not only the company but also American jobs and technological innovation.
His statement came after a report indicated that Nvidia has informed major Chinese clients -- including Alibaba Group (NYSE:BABA), ByteDance and Tencent Holdings (OTC:TCEHY) -- that it is working on a new variant of H20 AI chip models tailored to comply with U.S. export regulations.
Nvidia holds a growth score of 95.06% according to Benzinga Edge Stock Rankings. Click here to see how it compares to other leading tech companies such as AMD, Qualcomm, Alibaba and Tencent.
Photo Courtesy: Ron Adar on Shutterstock.com
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
