Current Access Level “I” – ID Only: CUID holders, alumni, and approved guests only
Explore our expert insights and analysis in leading energy and climate news stories.
Just wrapping up a tremendous week here in Chile with Center on Global Energy Policy's Critical Materials Program, led by Tom Moerenhout, and hosted by our non-resident fellow and former Energy and Mines Minister Juan Carlos Jobet.
Get the latest as our experts share their insights on global energy policy.
The commercial deals Trump struck on artificial intelligence cooperation will likely shift the global balance of power for one of this century's most critical technologies.
Hear in-depth conversations with the world’s top energy and climate leaders from government, business, academia, and civil society.
In today's polarized political landscape, energy policy has become increasingly partisan. States rich in both fossil fuels and renewable resources must confront growing electricity demand and aging infrastructure....
Find out more about our upcoming and past events.
Join us for a virtual information session focused on career pathways at the World Bank, one of the world’s leading international financial institutions dedicated to poverty reduction and...
Insights from the Center on Global Energy Policy
This Energy Explained post represents the research and views of the author(s). It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision.
Contributions to SIPA for the benefit of CGEP are general use gifts, which gives the Center discretion in how it allocates these funds. More information is available here. Rare cases of sponsored projects are clearly indicated.
Many analysts expecting President Donald Trump’s first foreign trip to yield breakthrough deals on Iran or Gaza may have found his recent four-day jaunt through Saudi Arabia, Qatar, and the United Arab Emirates somewhat underwhelming. But the commercial deals Trump struck on artificial intelligence cooperation will likely shift the global balance of power for one of this century’s most critical technologies. It’s just not clear yet in whose favor.
The Biden and Trump administrations have both been very clear about the importance of winning the global race for AI supremacy. The Biden administration’s approach to AI dominance was to provide financial support through the $280 billion CHIPS and Science Act and then largely play defense with regulation while trusting US companies to outcompete overseas rivals. These regulations included multiple rounds of semiconductor export controls, a broader “AI diffusion” framework that capped chip sales to most countries (including Saudi Arabia, Qatar, and the UAE), and expanded use of foreign investment screening, including the first-ever regulations on US investment in Chinese AI and semiconductor companies. The Biden administration bet that while these regulations may frustrate some American companies, they would prove a greater drag on the United States’ adversaries and thus preserve the country’s AI head start.
The Trump team feels strongly that these defensive controls undermine the United States’ ability to compete overseas by capping American companies’ revenues and market share. NVIDIA earned just $17 billion in China over the last year compared to more than $61 billion in the United States, a disparity that is largely due to US export controls. Leading American semiconductor tooling company Applied Materials, meanwhile, saw its revenue share from China fall from 43 percent to 25 percent over the last year while overall revenue grew just 6 percent. This is revenue that, according to NVIDIA CEO Jensen Huang, could have been reinvested into jobs and innovation in the United States.
The new administration has therefore opted to flip the Biden premise on its head by revoking the AI diffusion rule and announcing the sale of hundreds of thousands of cutting-edge chips to the Saudis and Emiratis, in addition to committing to build the world’s largest AI data center outside the United States in Abu Dhabi. It is gambling that enabling American companies to directly compete against Chinese rivals in the Gulf and beyond will generate sufficient revenue and innovation rewards to offset the increased risk of cutting-edge technology falling into the hands of US adversaries.
It is not clear which approach is right. But Trump’s “all gas, no brakes” approach is high-risk, high-reward, and almost impossible to reverse: once cutting-edge US AI hardware and software are sitting in a foreign data center or on a foreign server, adversaries can more easily target and acquire them. White House AI czar David Sacks dismissed these concerns while in Riyadh, saying there is “not a risk” of our cutting-edge technology falling into the wrong hands via “a friend like Saudi Arabia.”
But problematic technology transfers do not need to be intentional. It is true that the Saudis and Emiratis have both expressed publicly their desire to cooperate more closely with the United States on critical technologies, with the understanding that this will require them to distance themselves to some extent from China and Russia, and that their purchases of these tools enhances the market share of American companies and strengthens the American tech ecosystem. But it is also the case that advanced AI technology sitting in Saudi Arabia or the UAE will be an attractive target for Chinese, Russian, and other adversaries whether through licit or illicit means. At the end of the day, it is very difficult to guarantee that technology licensed for Riyadh or Abu Dhabi will stay there.
While US–China technology competition is certainly front of mind for most US national security policymakers, these deals will also have profound national security impacts within the region. The US providing hundreds of thousands of cutting-edge semiconductors with potential military applications to Saudi Arabia and the UAE could make it more difficult to secure a broad nuclear deal with their rival Iran, and could even violate the United States’ own legal requirement to ensure Israel maintains a qualitative military edge over its regional rivals. It is difficult to see how exporting so much powerful dual-use technology to the Middle East enhances regional stability.
That does not mean these risks cannot be overcome. But doing so requires taking them seriously, weighing them against the alternatives, and making an informed choice.
In this case, it is fair to question the effectiveness of Biden’s defensive approach. Former National Security Advisor Jake Sullivan often described the administration’s tech security strategy as a “small yard and high fence” focus on protecting a narrow set of particularly dangerous technologies while letting the rest spread unfettered. Yet the reality of general-purpose technologies like those subject to these recent deals—not just AI and semiconductors but also biotechnology—is that they can be used for revolutionarily positive or destructive ends, and it is extremely difficult to erect a fence around specific end uses at the point of sale.
Technology controls are also much more effective against laggards than near-peer competitors. Cutting off countries like North Korea, Iran, or even Russia from advanced AI chips can meaningfully delay these countries’ progress towards AI applications with serious national security implications. But chip controls did not stop—and perhaps even incentivized—Chinese innovations like Huawei’s Ascend chips and CloudMatrix system and the emergence of Chinese companies like DeepSeek and Manus AI.
Biden’s defensive approach was only as strong as its weakest link. For better or worse, Trump has now made that weakest link considerably weaker, and in so doing has fired the starting gun for a new phase of the global AI race. This new phase will have far fewer guardrails than that overseen by Biden, and leaves American companies with only one option to protect both US national security and their own market share: build, grow, and win.
President Donald Trump's first official foreign policy trip, as in his first term, was to Saudi Arabia earlier this month, with additional stops in Qatar and the United Arab Emirates.
President Donald Trump’s second term has begun with sweeping changes, just as the candidate promised: tariffs instituted against allies and adversaries alike, budgets and programs cut, and entire agencies shuttered.
Calls to "Drill, baby drill" are back with Donald Trump's return to the White House, and for US natural gas production, the catchphrase might also be a necessity over the next three years if demand for the fuel grows as steeply as expected.
Steps by the second Trump administration show it is taking a tougher stance against the regime of Nicolas Maduro. Trump recently issued an executive order that could levy a 25 percent tariff on countries that directly or indirectly import Venezuelan oil starting on April 2, and it has modified Chevron’s oil license to operate in the South American nation.
Can artificial intelligence help cut emissions of greenhouse gases? In this second edition of the Artificial Intelligence for Climate Change Mitigation Roadmap, a team of 25 co-authors led by CGEP Inaugural Fellow David Sandalow explores that question, finding that AI has the potential to make significant contributions to fighting climate change. The Roadmap’s 17 chapters provide introductions to AI and climate change, examine the potential for AI to help reduce greenhouse gas emissions in eight sectors and discuss cross-cutting topics such as large language models and government policy. Each chapter includes 5-10 specific, actionable recommendations for realizing AI’s potential to help fight climate change.
Microsoft’s plan to restart Three Mile Island points to the way forward.
Paul M. Dabbar testified on October 19, 2023 before the U.S. House of Representatives’ Energy & Commerce Subcommittee on Energy, Climate, and Grid Security.
