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Trump's Computer Chip Deals With Saudi Arabia and UAE Divide US Government

NYT > Economy

Over the course of a three-day trip to the Middle East, President Trump and his emissaries from Silicon Valley have transformed the Persian Gulf from an artificial-intelligence neophyte into an A.I. power broker. They have reached an enormous deal with the United Arab Emirates to deliver hundreds of thousands of today's most advanced chips from Nvidia annually to build one of the world's largest data center hubs in the region, three people familiar with the talks said. The shipments would begin this year, and include roughly 100,000 chips for G42, an Emirati A.I. firm, with the rest going to U.S. cloud service providers. The administration revealed the agreement on Thursday in an announcement unveiling a new A.I. campus in Abu Dhabi supported by 5 gigawatts of electrical power. It would the largest such project outside of the United States and help U.S. companies serve customers in Africa, Europe and Asia, the administration said.


Trump Administration Considers Large Chip Sale to Emirati A.I. Firm G42

NYT > Economy

The Trump administration is considering a deal that could send hundreds of thousands of U.S.-designed artificial intelligence chips to G42, an Emirati A.I. firm that the U.S. government has scrutinized in the past for its ties to China, three people familiar with the discussions said. The negotiations, which are ongoing, highlight a major shift in U.S. tech policy ahead of President Trump's visit to the Persian Gulf states this week. The talks have also created tension inside the Trump administration between tech- and business-minded leaders who want to close a deal before Mr. Trump's trip and national security officials who worry that the technology could be misused by the Emiratis. The Trump administration has embraced cutting direct deals for A.I. chips with officials from the Middle East, as it looks to strengthen U.S. ties in the region, said the people, who spoke on the condition of anonymity because the negotiations are ongoing. The approach marks a break from the Biden administration, which had rejected similar A.I. chip sales over fears that they could give autocratic governments with strong ties to China an edge over the United States in developing the most cutting-edge A.I. models in coming years.


For Trump, It's a New Era of Deal-Making With Tech's Most-Coveted Commodity

NYT > Economy

As President Trump tours the Middle East this week, governments that are flush with oil wealth will be focused on a different treasure, found in America's Silicon Valley. Artificial intelligence chips, which are made by U.S. companies like Nvidia and AMD, are highly coveted by governments across the Middle East. Leaders of Saudi Arabia, Qatar and the United Arab Emirates want to pour billions of dollars into the construction of data centers to put their countries at the forefront of a new technology heralded for its power to disrupt businesses and create trillions of dollars in economic value. The Gulf States have plenty of energy and cash to build data centers, which house the supercomputers that run A.I. systems. But they need U.S. government approval to buy the American-designed chips to power them.


Layoffs and Unemployment Grow Among College Graduates

NYT > Economy

But amid rapid advances in artificial intelligence and President Trump's targeting of federal agencies, which disproportionately support white-collar jobs, some wonder if a permanent decline for knowledge work has begun. "We're seeing a meaningful transition in the way work is done in the white-collar world," said Carl Tannenbaum, the chief economist of Northern Trust. "I tell people a wave is coming." To date, few industries epitomize the shift of the last few years better than the making of video games, which began a boom in 2020 as couch-bound Americans sought out new forms of home entertainment. The industry hired aggressively before reversing course and embarking on a period of layoffs.


White House Ignites Firestorm With Rules Governing A.I.'s Global Spread

NYT > Economy

The rules would allow most European countries, Japan and other close U.S. allies to make unfettered purchases of A.I. chips, while blocking two dozen adversaries, like China and Russia, from buying them. More than 100 other countries would face different quotas on the amount of A.I. chips they could receive from U.S. companies. The regulations would also make it easier for A.I. chips to be sent to trusted American companies that run data centers, like Google and Microsoft, than to their foreign competitors. The rules would establish security procedures that data centers would have to follow to keep A.I. systems safe from cybertheft. The Biden administration's plan has prompted swift pushback from American tech companies, which say global regulations could slow their businesses and create costly compliance requirements.


U.S. Weighs Ban on Chinese Drones, Citing National Security Concerns

NYT > Economy

In its notice, the Commerce Department said that drones could be used to damage physical infrastructure in a collision, deliver an explosive payload or gather information about critical infrastructure, including building layouts. In addition, with critical infrastructure in the United States increasingly reliant on drones, any efforts to remotely incapacitate them would create a risk to national security. The department added that in the past, drone companies based in China had pushed updates to their devices to create no-fly restrictions that disabled them in conflict zones defined by the companies. The notice said that the Commerce Department was also considering whether any measures could mitigate the risks and allow the sale of Chinese drones to continue, such as certain design requirements or cybersecurity software. The proposed rule is part of a broader effort by the Biden administration to examine and eliminate vulnerabilities in high-tech products and communications infrastructure that collect huge amounts of data about Americans.


How A.I. Could Reshape the Economic Geography of America

NYT > Economy

"This is a powerful technology that will sweep through American offices with potentially very significant geographic implications," said Mark Muro, a senior fellow at the Brookings Institution, where he studies the regional effects of technology and government policy. "We need to think about what's coming down the pike." At issue is a new and rapidly growing breed of the technology known as generative A.I., which can quickly draft business reports, write software and answer questions, often with human-level skill. Already, predictions abound that generative A.I. will displace workers in call centers, software developers and business analysts. That pattern of technology disruption has happened before.


Why Mergers of Carmakers Like Honda and Nissan Often Falter

NYT > Economy

Nissan has more significant troubles than Honda and in recent years has slogged through management upheaval. In the United States, a critical market where Nissan used to earn significant profits, the company's market share has fallen sharply as it struggles to sell cars and trucks that haven't received significant upgrades in recent years. In the period from April to September, Nissan's operating profit plunged 90 percent, and the automaker recently said it aimed to lose 9,000 employees worldwide and cut global production by about 20 percent. A merger could help Honda and Nissan develop electric cars faster and at lower cost -- in theory. But other companies have struggled to achieve such gains in practice, often because the priorities of companies working together often shift and diverge. Ford Motor and Volkswagen teamed up a few years ago to work on electric vehicles and autonomous driving technology.


Biden Targets China's Chip Industry With Wider Trade Bans

NYT > Economy

The Biden administration announced on Monday broader restrictions on advanced technology that can be sent to China, in an effort to prevent the country from developing its own advanced chips for military equipment and artificial intelligence. The restrictions will prohibit the sales of certain types of chips and machinery to China, and will add more than 100 Chinese companies to a restricted trade list. The move marks the Biden administration's third major update over the past three years to a set of rules that have tried to cut China off from the world's most advanced technology. The rules are also likely to be the administration's last on Chinese technology before President-elect Donald J. Trump's inauguration next month, aiming to cement the Biden administration's legacy in slowing down a rival country's technological progress. Commerce Secretary Gina Raimondo told reporters in a call on Sunday that the move represented "the strongest controls ever enacted by the U.S. to degrade the P.R.C.'s ability to make the most advanced chips that they're using in their military modernization," referring to the People's Republic of China.


House Committee Targets Chip Technology Firms for China Ties

NYT > Economy

The chips are needed to power high-performance computing and artificial intelligence. Those capacities are used for inventing pharmaceuticals, powering chatbots and studying climate change. But U.S. officials maintain that China can also use them to create new weapons systems, run disinformation attacks and surveil persecuted citizens. The Biden administration has steadily tightened its technology restrictions on China, and it is weighing another update to its rules. That has touched off a fight among lawmakers, administration officials and company executives over how much the United States should restrain its own industry.