Think Tank Experts Worry About UAE Leakage in Chips Deal
Center for Strategic and International Studies adviser Bill Reinsch, who served as undersecretary of commerce for export administration for seven years earlier in his career, said he thinks loosening up export controls on AI-capable chips is the right move, but he regrets that exports to the United Arab Emirates are the prominent example.
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Reinsch, who was discussing the UAE sales on a CSIS podcast released Nov. 11, said he has mixed feelings about the news.
"I think it may be the right policy, but the UAE is not the place to begin," he said. Democratic politicians have criticized the decision, arguing that the UAE is a risky partner (see 2505160049).
However, it's not a wholly new development, despite the administration's trumpeting of the sale. Microsoft said it exported AI-capable chips to the UAE during the Biden administration, too (see 2511030019).
Reinsch said, "The dilemma of the export controller is to always walk a fine line between under-controlling and over-controlling." He said if you over-control, you hurt the revenue of your companies, and make it less likely they have the capital to develop further advances in the technology.
"The administration, when it comes to AI, seems to have seized on the danger of over-control," he said. "I think they are right about that."
However, Reinsch said, if you're trying to make the American AI tech stack the global standard "at the same time as trying to keep the high end out of the hands of the Chinese, .... you really have to do a lot of due diligence, that you're selling your tech stacks to people who are going to keep them."
He said the UAE has not shown itself to be committed to preventing onward shipments to countries the U.S. sees as adversaries, nor does it have the enforcement infrastructure, even if it had the willingness.
"There's a long record of leakage from the UAE to China and Russia," he said.
Philip Luck, director of CSIS's international economics program, said he also argued for an export control approach during the Biden administration that emphasized the need for American firms to have adequate revenue for innovation.
However, he said, as he traveled to the UAE as a State Department official, he was asking their government "to do more on this issue," to stop goods that were transiting through free-trade zones in Dubai to Russia.