Months after the United Arab Emirates invested billions in a cryptocurrency associated with Donald Trump’s family, it seems that this investment may soon yield significant returns. Reports indicate that the UAE is close to finalizing a substantial deal regarding advanced American semiconductor technology. President Trump is reportedly contemplating a shift in U.S. policy that could provide the UAE with access to high-tech semiconductors. This potential change could be discussed during Trump’s upcoming visit to the region, where he plans to initiate formal talks aimed at revising the current “AI diffusion rule.” This regulation presently limits chip exports to the UAE and numerous other nations.
### The Significance of the Deal
Although the negotiations regarding semiconductors and the recent cryptocurrency investment are not officially connected, both developments illustrate the UAE’s increasing financial and political ties with the Trump administration. Critics argue that Trump’s familial association with certain cryptocurrencies, which foreign governments may acquire for influence, presents a serious conflict of interest. Newsweek attempted to obtain a comment from the White House but did not receive a response.
### Key Concerns Raised
Democratic Senator Elizabeth Warren and Representative Jake Auchincloss have previously expressed concerns to federal regulators regarding the potential for foreign influence through the acquisition of Trump’s cryptocurrency tokens, which are distinct from the UAE investment. They warned that individuals, including leaders from hostile nations, could discreetly purchase these tokens, raising alarms about unchecked foreign influence over the U.S. presidency. The two lawmakers made these assertions in a stern letter addressed to the Office of Government Ethics, the Treasury Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission shortly after the inauguration in January.
### Major Investment Announced
During a cryptocurrency conference held in Dubai last week, Zach Witkoff, co-founder of World Liberty Financial and a close associate of Trump, revealed that a fund backed by the UAE had chosen the Trump family’s stablecoin, USD1, for a substantial $2 billion investment in Binance, the world’s largest cryptocurrency exchange. A company owned by Trump holds a 60% stake in World Liberty, which is behind USD1, and is entitled to 75% of revenue generated from coin sales. Eric Trump and Donald Trump Jr. are actively involved in managing the firm, supported by partners Zachary Folkman, Chase Herro, and Zach Witkoff.
### Implications for UAE’s AI Ambitions
The UAE appears on the verge of a significant victory as the U.S. considers lifting export restrictions that have hindered the Gulf nation’s ambitions in artificial intelligence. This potential policy change follows months of diplomatic efforts by Abu Dhabi to enhance its AI capabilities. In March, UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan met with Trump and senior U.S. officials in Washington, advocating for the relaxation of these restrictions. Shortly thereafter, the UAE announced plans to invest up to $1.4 trillion in the U.S. economy over the next ten years, focusing on sectors like AI, semiconductors, energy, and manufacturing. These export restrictions originated from global chip regulations enacted during President Joe Biden’s final week in office, which threatened to impede the UAE’s technological development. Since returning to the White House, Trump has reversed many of Biden’s policies and has shown firm support for the UAE.
### Market Reaction to Policy Changes
Following speculations about a possible reversal of policy, shares of Nvidia saw an increase of over 5% in New York trading. At the Token2049 conference in Dubai, Witkoff announced that the stablecoin USD1 would serve as the medium for MGX’s multi-billion-dollar transaction with Binance. MGX is an Emirati state-owned investment firm focused on AI. Witkoff expressed excitement over the selection of USD1 for this investment, underscoring its significance.
### Trump’s Branding Strategy
Eric Trump, also present at the conference, positioned the deal within the context of the family’s broader branding strategy in the region. He remarked that individuals would not merely be using USD1 in everyday transactions but would instead be engaging with the Trump International Hotel and Tower.
### Overview of World Liberty Financial
Founded in 2024, World Liberty Financial positions itself as a decentralized finance platform. Its stablecoin, USD1, is pegged to the U.S. dollar and is backed by U.S. Treasuries and cash equivalents. Issued on Binance’s blockchain, USD1 has reportedly reached a circulation of $2.1 billion, according to CoinMarketCap.
### Opinions from Industry Leaders
Zach Witkoff praised the UAE’s innovative spirit, calling it one of the most remarkable countries in terms of innovation worldwide. Jensen Huang, CEO of Nvidia, highlighted the need for the forthcoming diffusion rule to reflect the fundamental changes that have occurred since the last regulation was established. Meanwhile, Anthony Scaramucci, a former advisor to Trump, voiced his concerns on social media, criticizing the association of Trump’s cryptocurrency ventures with corruption.
### Looking Ahead
Trump is scheduled to visit the UAE from May 13 to May 16, coinciding with the enforcement deadline for the AI diffusion rule, which was implemented in late 2024 to prevent sensitive chip technology from being exported to adversarial nations or being rerouted through Gulf states.
