Make it easier for China to get its hands on sensitive American technology.

Staff warned of major security risks from giving UAE new tech access. The White House went ahead anyway.

Commerce Department staffers recommended against loosening export restrictions on the Gulf ally in previously unreported warnings, arguing it could make it easier for China to get its hands on sensitive American technology.

By Ari Hawkins and Ben Johansen

The Trump administration ignored warnings from career staff at the Commerce Department when it granted the United Arab Emirates sweeping access to advanced American semiconductors and other technology, according to three former officials with knowledge of the reports and two other people familiar with the matter.

The Commerce Department’s Bureau of Industry and Security announced on July 10 that it was loosening restrictions on sensitive tech exports to the UAE, a key ally in the war in the Middle East whose leaders pledged last year to invest more than $1 trillion in the U.S. over the coming decade. According to one of the people familiar and two former officials, the announcement surprised staff inside the agency, which is tasked with securing American tech from adversaries and criminals. It also ran directly against recommendations staffers submitted to senior Trump administration officials at the department last year.

The five people said agency staff compiled and circulated multiple internal reports and memos last fall documenting security risks tied to G42, the UAE’s state-backed AI giant, and its affiliated companies. In the assessments, which have not been previously reported, staff warned that expanding the companies’ access to U.S. technology — such as cutting-edge processors from companies like Nvidia, as well as the powerful AI models built with them — made it more likely the technology would get into the hands of adversaries. In particular, they flagged concerns about China’s influence in the Emirates.

“It is an open secret that the UAE is the primary diversion point for sensitive U.S. technologies in the Middle East — by orders of magnitude,” said one of the people familiar, who like others in this story was granted anonymity to describe internal deliberations.

But senior Commerce officials who were presented with the reports, including Jeffrey Kessler, the Commerce undersecretary in charge of BIS, ultimately brushed aside the warnings, the people said.

BIS did not respond to a series of questions about the reports staff at the agency compiled. The agency also did not answer whether Kessler or other senior officials, including Commerce Secretary Howard Lutnick, were aware of the warnings from agency staff about expanding U.S. tech access to the UAE and G42.

“American tech policy should ensure that the United States is the global partner of choice for investing in cutting-edge technologies, rather than our adversaries,” BIS said in a statement. “Under President [Donald] Trump, this Administration is using diplomacy, dealmaking, and regulatory reform to ensure continued American dominance in critical technologies for years to come.”

In November, the Commerce Department announced it had authorized G42 to buy up to 35,000 of Nvidia’s advanced Blackwell chips. The July 10 move goes far further, granting approved Emirati firms streamlined access to not just those chips but also military equipment, satellite components and goods used in civilian nuclear power generation. Nvidia declined to comment.

The decision marks one of the most consequential policy shifts in years to deepen technology ties with the Gulf. But China hard-liners and security hawks worry the changes make it far more likely Beijing will get its hands on the United States’ most closely held tech at a fraught time in the global race to dominate advanced AI.

A White House official granted anonymity to share details about the deliberations said that “Commerce’s new rulemaking is a reflection of UAE’s demonstrated commitments to American security and the U.S. technology stack.” The official did not respond to comments about the reports recommending against the moves.

Until now, sales of controlled technology to the UAE required individual export licenses that the Commerce Department reviewed case by case — a process that has been taking months or longer amid bottlenecks and internal turmoil at the export control agency.

UAE’s new designation, which the Trump administration framed partly as a reward for decades of closer ties and coordination on Iran in their notice, helps implement the AI agreement the two countries signed during Trump’s visit to the region in May 2025.

Commerce officials, however, warned in a series of reports last fall that the Trump administration should not immediately follow through and grant these kinds of tech export licenses to G42 and some of its subsidiaries, including Core42, two former BIS officials who were briefed on progress and one person familiar with the recommendations said. Officials issued a similar recommendation to hold off on the licenses in a report on Mohamed bin Zayed University of Artificial Intelligence, an Abu Dhabi-based, state-funded university that has co-developed AI models with G42, said one of the former officials briefed on progress as well as another former official and a person familiar. MBZUAI did not respond to a request for comment.

Among the risks career staff flagged in their reports were that G42 relied on unsecured systems that could be accessed by third parties. The people and former officials also noted that G42 relied on equipment and services from Huawei, the U.S.-sanctioned Chinese telecommunications giant. Huawei did not respond to a request for comment.

In addition, staff flagged concerns in a report on Core42 about the parent company’s CEO, Peng Xiao, a Chinese-born American executive who renounced his U.S. citizenship to become an Emirati national, said two former officials and a person familiar. Core42 did not respond to a request for comment.

Staff also documented concerns that other Emirati companies G42 works with employ senior executives who previously worked at, invested in or had business relationships with Chinese technology companies, including companies that were later sanctioned by the U.S., said two other former officials and a person with knowledge of the situation.

In an email, a spokesperson for G42 said the company has worked for several years to address the types of security concerns raised in the reports through consultations with U.S. government agencies, regulators and technology partners. The company did not make Xiao available for comment.

“G42 has undertaken substantial measures to strengthen its governance, compliance, security controls and technology protection framework, including the implementation of a Regulated Technology Environment with robust non-diversion and unauthorized access controls,” the company said. “These measures are reflected in subsequent U.S. government actions and policy decisions regarding the UAE and G42.”

Yet even as they compiled detailed accounts of all the security risks, career staff were not optimistic their warnings would be heeded. One of the former BIS officials told POLITICO that compiling the reports “felt like I was fighting a losing battle when trying to make the national security argument.”

“There was a sense even as we were doing [the report] that it was already a foregone conclusion and we were just sort of spitting in the wind,” another of the former BIS officials close to the process said, adding that the sense from staff was, “‘Well, we’re going to do our job and we’re going to tell them, but I don’t think they actually care.’”

Some security experts and lawmakers are now raising alarms about the July 10 export control changes, in particular.

“I don’t know that we have the data that suggests that the UAE is a trustworthy partner at the level that the administration just granted them,” said Michael Sobolik, a senior fellow at the right-leaning Hudson Institute think tank and a former aide to Sen. Ted Cruz (R-Texas). For years, U.S. officials have flagged concerns about security ties between the UAE and the Chinese military, he added. “I think it raises serious questions about the political relationship between Abu Dhabi and Beijing.”

Facing repeated questioning from members of the House Foreign Affairs Committee at a July 14 hearing, Kessler defended the decision to grant the UAE broader access, calling it “an appropriate revision to the export control country groups that recognizes the UAE’s status as a key ally in the region.”

Kessler added that forging closer relationships with the UAE and encouraging the country to invest in the American tech stack is “one of the most significant achievements of the administration.”

But critics say that push has moved faster than the U.S. government is able to resolve longstanding concerns about the UAE’s relationship with China and prevent sensitive American technology from being diverted to other countries or remotely accessed. “They are making us do things that we should not be doing,” said one of the people familiar.

Democrats in Congress have also pointed towhat they call an innate conflict of interest: the purchase of a 49 percent stake in World Liberty Financial, the Trump-linked crypto venture, by a firm backed by G42’s chair, Sheikh Tahnoon bin Zayed Al Nahyan, for $500 million days before Trump’s 2025 inauguration, according to a report in the Wall Street Journal in late January. Tahnoon is also the brother of the UAE’s president and serves as the country’s national security adviser.

“It reeks of corruption,” Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee, said in an interview last week. In a statement on July 10, she also asked for both Kessler and Lutnick to testify before the committee.

“The UAE secretly buys a 49 percent stake in Donald Trump’s crypto business. Then the UAE gets access to chips that the U.S.’s own security people say should not be given to the UAE,” Warren said in the interview. “What does the UAE plan to do with those chips? The concern of our own security people is that they end up in China and help advance Chinese weapons systems that will be used against the U.S.”

World Liberty Financial did not respond to a request for comment. The White House did not respond to questions about the deal, but White House spokesperson Anna Kelly told the Wall Street Journal in its reporting on the deal that there are “no conflicts of interest” and that Trump’s assets are in a trust his children manage.

The UAE Embassy referred POLITICO to past remarks from UAE Ambassador Yousef Al Otaiba touting strong economic ties with the United States at an event in May.