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Miami Herald
16-05-2025
- Business
- Miami Herald
Trump Backs Massive Middle East AI Hub to Counter China
President Donald Trump has signed off on a major agreement with the United Arab Emirates to build the largest artificial intelligence campus outside the United States. The deal lifts earlier restrictions that had blocked the Gulf nation's access to advanced U.S. chips over concerns they could be diverted to China. Finalized during Trump's visit to the Middle East, the agreement represents a diplomatic and technological breakthrough. It signals renewed confidence by the U.S. that key allies such as the UAE can be trusted to handle sensitive AI hardware-provided strict oversight and American involvement are in place. Newsweek has reached to the U.S. Commerce Department and UAE's foreign ministry for comment. The agreement marks a sharp turn from the Biden-era policy, which limited chip exports to nations seen as too close to China. The Trump administration has taken a more flexible approach, emphasizing containment of Chinese influence while expanding tech collaboration with partners in the Gulf. By allowing the UAE access to top-tier AI technology, Washington aims to outpace Beijing in shaping the global AI landscape. The new deal seeks to embed U.S. standards in regional infrastructure without forcing nations to choose between superpowers outright. At the center of the pact is a 10-square-mile AI campus in Abu Dhabi, backed by 5 gigawatts of power-enough to support around 2.5 million of Nvidia's flagship B200 chips, according to estimates by Rand Corporation analyst Lennart Heim. The U.S. Commerce Department called the initiative the largest AI infrastructure project to date. UAE state-linked firm G42 will construct the site, but American companies will operate it and provide U.S.-managed cloud services across the region. The White House said the UAE has committed to building or financing equivalent data centers in the U.S., while also aligning its national security policies with American standards. Despite recent reforms, concerns remain over China's influence in the UAE. G42 has removed Chinese hardware and shed investments under U.S. pressure, yet firms such as Huawei and Alibaba Cloud still maintain a presence. U.S. officials have also flagged the risks of technology leakage through infrastructure still using Chinese components or software. Trump officials say the new agreement includes safeguards to prevent such diversions. Trump's AI czar David Sacks said in Riyadh this week that Biden-era controls were "never intended to capture friends, allies, strategic partners." Rand Corporation analyst Lennart Heim wrote on X: "That's bigger than all other major AI infrastructure announcements we've seen so far. That is enough power to support 2.5 million of Nvidia's top-line B200 chips." A White House statement read: "Commitments by the UAE to further align their national security regulations with the United States, including strong protections to prevent the diversion of U.S.-origin technology." The AI campus is expected to begin operations later this year, with the UAE preparing to import up to 500,000 Nvidia chips annually as part of the agreement. The project signals a deepening U.S. presence in Middle East tech infrastructure and a possible new chapter in global AI competition. Related Articles Satellite Photo Shows US Aircraft Carrier at China's DoorstepChina's Space Projects on US Doorstep Have Military WorriedPhotos Show How North and South Korea Train Special ForcesPanama Asks Trump to Clean Up Mess Left From Biden-Era Migration Surge 2025 NEWSWEEK DIGITAL LLC.
South China Morning Post
09-04-2025
- Business
- South China Morning Post
TSMC could face US$1 billion fine over chip found in Huawei AI processor, sources say
Taiwan Semiconductor Manufacturing Company (TSMC) could face a penalty of US$1 billion or more to settle a US export control investigation over a chip it made that ended up inside a Huawei Technologies artificial intelligence (AI) processor, according to two people familiar with the matter. Advertisement The US Department of Commerce had been investigating the world's biggest contract chipmaker's work for China-based Sophgo , the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B AI processor , according to the people, who requested anonymity because they were not authorised to speak publicly about the matter. Huawei – a company at the centre of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft – is on a US trade list that restricts it from receiving goods made with US technology. TSMC made nearly 3 million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Centre in Arlington, Virginia, who is tracking Chinese developments in AI. A billboard advertisement for a Huawei smartphone in Chongqing, China. The US$1 billion-plus potential penalty came from export control regulations allowing for a fine of up to twice the value of transactions that violated the rules, the sources said. Because TSMC's chipmaking equipment includes US technology, the company's Taiwan factories are within reach of US export controls that prevent it from making chips for Huawei, or producing certain advanced chips for any customer in China without a US licence.
Japan Times
09-04-2025
- Business
- Japan Times
TSMC could face $1 billion or more fine from U.S. probe, sources say
Taiwan Semiconductor Manufacturing Co. (TSMC) could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei artificial intelligence processor, according to two people familiar with the matter. The U.S. Department of Commerce has been investigating the world's biggest contract chipmaker's work for China-based Sophgo, the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B artificial intelligence processor, according to the people, who requested anonymity because they were not authorized to speak publicly about the matter. Huawei — a company at the center of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft — is on a U.S. trade list that restricts it from receiving goods made with U.S. technology. TSMC made nearly 3 million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI. The $1 billion-plus potential penalty comes from export control regulations allowing for a fine of up to twice the value of transactions that violate the rules, the sources said. Because TSMC's chipmaking equipment includes U.S. technology, the company's Taiwan factories are within reach of U.S. export controls that prevent it from making chips for Huawei, or producing certain advanced chips for any customer in China without a U.S. license. Heim said that based on the design, which is for AI applications, TSMC should not have made the chip for a company headquartered in China, especially given the risk that it could be diverted to a restricted entity such as Huawei. Shares of TSMC traded in the U.S. erased a nearly 3% gain to trade slightly lower after the news. Penalizing TSMC comes at a critical moment for U.S.-Taiwan relations as the two begin renegotiating their trading relationship after Trump last week slapped a 32% levy on imports from Taipei. The tariffs exclude chips, but Trump has said his team is looking at levies on semiconductors. In March, TSMC said at the White House that it plans to make a fresh $100 billion investment in the United States that includes building five additional chip facilities in coming years. It could not be determined how the Trump administration will proceed with TSMC or when the matter would be resolved. Top officials have said they plan to seek higher penalties for export violations. A spokesperson for the Commerce Department declined comment. TSMC spokesperson Nina Kao said in a statement that the company is committed to complying with the law. She added that TSMC has not supplied to Huawei since mid-September 2020 and that they are cooperating with the Commerce Department. No public action has been taken against TSMC. But typically, the Commerce Department issues a "proposed charging letter" to a company it believes has engaged in prohibited conduct. The letter usually cites the dates alleged violations took place, the value, and the formula for a civil penalty, and it gives the company 30 days to respond. At a conference in Washington last month, U.S. Commerce Secretary Howard Lutnick spoke about the role of export control enforcement in addressing the threat from China. "We are going to seek in this administration a dramatic increase in enforcement and fines for people who break the rules," Lutnick said. "We have had enough of people trying to make a dollar supporting the people who seek to destroy our way of life." Jeffrey Kessler, who was confirmed in March as Under Secretary of Commerce for Industry and Security to oversee U.S. export controls, was more targeted at his Feb. 27 nomination hearing, saying that reports of TSMC chips going to Huawei was "a huge concern" and that "strong enforcement" was critical. A 10-figure fine for export control violations would be rare. In 2023, BIS imposed a $300 million penalty on Seagate Technology Holdings as part of a settlement over its shipping of over $1.1 billion worth of hard disk drives to Huawei. TSMC first came under scrutiny last fall. TechInsights, a Canadian tech research firm, took apart a Huawei 910B AI accelerator and found a TSMC die, as it's also called, in the multi-chip system. After the TechInsights finding, TSMC suspended shipments to Sophgo and, in November, the Commerce Department ordered the chipmaker to halt shipments to China of seven-nanometer or more advanced chips that could be used in AI applications. In January, Sophgo, which in October denied any business relationship with Huawei, was placed on the same Commerce Department restricted trade list as Huawei. Sophgo could not be reached for comment. Huawei's Ascend 910B has been viewed as the most advanced mass-produced AI chip available from a Chinese company, providing an alternative to California-based industry leader Nvidia.
Yahoo
08-04-2025
- Business
- Yahoo
Taiwan Semi Faces $1B+ Risk Over U.S. Probe Into Huawei-Linked Chips
Taiwan Semiconductor Manufacturing (NYSE:TSM) could face a fine of $1 billion or more as part of a U.S. export control investigation, according to a report from Reuters citing people familiar with the matter. The probe by the U.S. Department of Commerce centers on a chip designed by the Chinese firm Sophgo, which was manufactured by TSM and later found in Huawei's high-end Ascend 910B AI processor. That chip is used in China to power large language models and AI chatbots, competing with products from Nvidia (NASDAQ:NVDA). Back in October, TSM stopped shipping to Sophgo after learning the chip had ended up in Huawei's processor a company restricted under U.S. export laws. The situation escalated in December when the Biden administration added Sophgo to the U.S. blacklist. Sophgo responded by saying it had no business relationship with Huawei and that the Commerce investigation wasn't related to them. The reported fine stems from export control rules, which allow the U.S. to levy penalties up to twice the value of unauthorized transactions. TSM told Reuters it's committed to legal compliance and hasn't supplied Huawei since mid-September 2020. A company spokesperson also said TSM is cooperating with the Commerce Department. Previously, TSM had informed U.S. officials after TechInsights tore down a Huawei device and found a chip made at a TSM facility. At that time, TSM said it wasn't aware of any investigation and had proactively reached out to the government. According to RAND researcher Lennart Heim, TSM manufactured nearly three million chips based on Sophgo's designs in recent years, and many of those are believed to have made their way to Huawei. This article first appeared on GuruFocus. Sign in to access your portfolio
Reuters
08-04-2025
- Business
- Reuters
Exclusive: TSMC could face $1 billion or more fine from US probe, sources say
April 8 (Reuters) - Taiwan Semiconductor Manufacturing ( opens new tab could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei AI processor, according to two people familiar with the matter. The U.S. Department of Commerce has been investigating the world's biggest contract chipmaker's work for China-based Sophgo, the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B artificial intelligence processor, according to the people, who requested anonymity because they were not authorized to speak publicly about the matter. Huawei -- a company at the center of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft -- is on a U.S. trade list that restricts it from receiving goods made with U.S. technology. TSMC made nearly three million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI. The $1 billion-plus potential penalty comes from export control regulations allowing for a fine of up to twice the value of transactions that violate the rules, the sources said. Because TSMC's chipmaking equipment includes U.S. technology, the company's Taiwan factories are within reach of U.S. export controls that prevent it from making chips for Huawei, or producing certain advanced chips for any customer in China without a U.S. license. Heim said that based on the design, which is for AI applications, TSMC should not have made the chip for a company headquartered in China, especially given the risk that it could be diverted to a restricted entity like Huawei. Penalizing TSMC comes at a critical moment for U.S.-Taiwan relations as the two countries begin re-negotiating their trading relationship after Trump last week slapped a 32% levy on imports from Taipei. The tariffs exclude chips, but Trump has said his team is looking at levies on semiconductors. In March, TSMC said at the White House that it plans to make a fresh $100 billion investment in the United States that includes building five additional chip facilities in coming years. Reuters could not determine how the Trump administration will proceed with TSMC or when the matter would be resolved. Top officials have said they plan to seek higher penalties for export violations. A spokesperson for the Commerce Department declined comment. TSMC spokesperson Nina Kao said in a statement that the company is committed to complying with the law. She added that TSMC has not supplied to Huawei since mid-September 2020 and that they are cooperating with the Commerce Department. No public action has been taken against TSMC. But typically, Commerce issues a "proposed charging letter" to a company it believes has engaged in prohibited conduct. The letter usually cites the dates alleged violations took place, the value, and the formula for a civil penalty, and it gives the company 30 days to respond. MORE ENFORCEMENT At a conference in Washington last month, U.S. Commerce Secretary Howard Lutnick spoke about the role of export control enforcement in addressing the threat from China. "We are going to seek in this administration a dramatic increase in enforcement and fines for people who break the rules," Lutnick said. "We have had enough of people trying to make a dollar supporting the people who seek to destroy our way of life." Jeffrey Kessler, who was confirmed in March as Under Secretary of Commerce for Industry and Security to oversee U.S. export controls, was more targeted at his Feb. 27 nomination hearing, saying that reports of TSMC chips going to Huawei was "a huge concern" and that "strong enforcement" was critical. A 10-figure fine for export control violations would be rare. In 2023, BIS imposed a $300 million penalty on Seagate Technology Holdings (STX.O), opens new tab as part of a settlement over its shipping over $1.1 billion worth of hard disk drives to Huawei, as first reported by Reuters. TSMC first came under scrutiny last fall. TechInsights, a Canadian tech research firm, took apart a Huawei 910B AI accelerator and found a TSMC die, as it's also called, in the multi-chip system. After the TechInsights finding, TSMC suspended shipments to Sophgo and, in November, as Reuters reported, the Commerce Department ordered the chipmaker to halt shipments to China of seven-nanometer or more advanced chips that could be used in AI applications. In January, Sophgo, which in October denied any business relationship with Huawei, was placed on the same Commerce department restricted trade list as Huawei. Sophgo could not be reached for comment. Huawei's Ascend 910B has been viewed as the most advanced mass-produced AI chip available from a Chinese company, providing an alternative to California-based industry leader Nvidia.
