UAE export rule favors MGX as Commerce eases chip controls

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UAE export rule favors MGX

Highlights

Commerce Department will favorably review MGX semiconductor and server export licenses to the UAE, with the new rule set for July 14 publication.
The UAE, G42, and Core42 gain access to license exceptions for advanced computing, streamlining data center projects by Amazon, Google, Meta, Microsoft, OpenAI, Oracle, xAI, and others.
Export easing may accelerate U.S. chip sales to the UAE while retaining controls to prevent sensitive technology transfer to China amid political scrutiny over MGX's crypto-linked funding.

Export rule expands UAE access

As first reported by CNBC, an unpublished 17-page rule viewable in the Federal Register says the Commerce Department’s Bureau of Industry and Security will favorably review export license applications involving MGX semiconductors and servers destined for the UAE. The rule is scheduled for official publication on Tuesday, July 14.

The broader measure also gives the UAE government, Abu Dhabi artificial intelligence group G42 and its cloud unit Core42 access to license exceptions for certain advanced computing equipment. In a statement, the Commerce Department says it will significantly upgrade the UAE’s status under export regulations in recognition of its role as a U.S. Major Defense Partner and its support for U.S. national security interests, including Operation Epic Fury, the war against Iran.

The changes also provide streamlined treatment for some controlled equipment used in UAE operations and data center projects by Amazon, Apple, Google, Meta, Microsoft, OpenAI, Oracle and xAI. The rule additionally eases controls on some military, satellite and spacecraft-related exports.

Political scrutiny and market implications

Sen. Elizabeth Warren criticizes the move as corrupt because MGX used USD1, a stablecoin issued by Trump family-affiliated World Liberty Financial, to complete its investment in Binance, the world’s largest crypto exchange by daily trading volume. She says the arrangement raises questions about whether Trump’s financial interests could shape U.S. policy toward the UAE.

Warren, the ranking Democrat on the Senate Banking Committee, calls on Commerce Secretary Howard Lutnick and BIS Under Secretary Jeffrey Kessler to testify before Congress. She and other Senate Democrats also call for hearings into whether UAE-linked investments in World Liberty influence administration decisions on advanced chips, arms sales and other policies benefiting the country, while Kessler is already scheduled to testify next week before the House Committee on Foreign Affairs.

There is no evidence in the rule that the UAE’s financial dealings with World Liberty influence Commerce’s decision. The export changes could accelerate chip sales by reducing the need for separate licenses, but they keep restrictions intended to prevent sensitive technology from reaching prohibited users or countries such as China.

In our earlier report on Senate Democrats’ push for hearings into President Donald Trump’s crypto ventures, we detailed concerns that UAE-linked backing of World Liberty Financial could pose national security risks and create avenues for foreign influence. We noted that lawmakers, including Sen. Elizabeth Warren, pointed to Trump’s 2025 financial disclosure and urged committees to examine whether such ties could affect administration policy decisions, including areas involving advanced AI chip restrictions.

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