Why Trump's AI diplomacy is doomed to fail

""When you ask about AI and chips, Saudi Arabia has a huge need for computing power," Crown Prince Mohammed bin Salman (MBS) said at a press conference on Tuesday with President Trump, where he floated a potential $50-billion purchase of American microchips. Trump's Commerce Department signed off on exporting 70,000 such advanced microchips made by Nvidia to state-owned AI firms in the United Arab Emirates (UAE) and Saudi Arabia."

"Little wonder why Jensen Huang, Nvidia's high-flying CEO, joined a gaggle of tech moguls - including Elon Musk, Tim Cook, and Michael Dell - at a dinner honoring the Saudi royal. By the time MBS was on his flight back to Riyadh, he could tout a new data-center partnership with Musk's xAI and fleshed-out joint ventures with firms like Amazon and Cisco. Silicon Valley's bevy of deals with the oil-rich Gulf states are central to so-called "AI diplomacy": a policy bet that the United States can leverage access to select tech to compete with China's broader economic influence."

"'We're leading by a lot on AI,' Trump chimed in during the press conference. 'China would be in second place, but we're leading by a lot.' In his administration, this has been a constant refrain. David Sacks, his AI czar and a venture capitalist, has argued that chip sales could ' shift the balance of power in the region,' as the White House's AI diplomacy ' boxes China out of the Middle East.'"

Crown Prince Mohammed bin Salman floated a potential $50-billion purchase of American microchips during a press conference with President Trump. The Commerce Department approved exports of 70,000 advanced Nvidia microchips to state-owned AI firms in the UAE and Saudi Arabia. Silicon Valley executives accompanied the Saudi visit and announced data-center partnerships and joint ventures with Gulf firms. The White House frames these transactions as "AI diplomacy," intended to use selective tech access to counter Chinese influence. Analysts caution that chips alone cannot make Gulf states decouple from China given entrenched China-Gulf relations and reliance on Chinese supply chains.

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