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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.
The National
16-05-2025
- Business
- The National
UAE chip deal: plans for 5GW AI Campus provide path forward
Following months of intense efforts from US-based technology companies and UAE officials to make sure the Emirates has enough chips for its artificial intelligence aspirations, the announced plans for a new 5GW UAE-US AI Campus in Abu Dhabi give reason for ample optimism. "To put the new 5GW AI campus in Abu Dhabi into perspective. It would support up to 2.5 million NVIDIA B200s. That's bigger than all other major AI infrastructure announcements we've seen so far," wrote Lennart Heim, an associate information scientist at the Rand Corporation think tank. A source familiar with the UAE's AI initiatives told The National that with the UAE-US AI Campus, and more broadly, the US-UAE AI Acceleration Partnership framework that makes it possible, "approved UAE entities will have access to the chips they need'. In a news release from the US Department of Commerce explaining the planned campus, Commerce Secretary Howard Lutnick spoke about how the facility would prevent all that computing power from falling into the wrong hands. "The agreement also contains strong security guarantees to prevent diversion of US technology," he said. "By extending the world's leading American tech stack to an important strategic partner in the region, this agreement is a major milestone in achieving President [Donald] Trump's vision for US AI dominance.' The developments announced shortly after Mr Trump's arrival in Abu Dhabi on Thursday are likely to be greeted with a sigh of relief by many in both the private and public sectors of the UAE, which is seeking to capitalise on years of research with continuing efforts to expand its AI infrastructure amid an economic transition away from oil. Without the announced campus and framework, those AI aspirations might have hit a roadblock due to controversial chip export policies from the US and motivated by geopolitical events of the last several years. The proposed chip export rules, also known as AI diffusion rules, were the result of a Joe Biden-era policy that sought to blunt AI technological advancement in China. The export rules, set to go into effect on May 15, were largely driven by a fear that US AI chip technology would be used by countries like China, which the US has viewed in an increasingly adversarial light in recent years. Under the policy, countries were split into tiers that would determine how many powerful chips and GPUs they could buy. Falling into the first tier and unaffected by the rules are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the UK. Other countries, such as the UAE, Saudi Arabia, Israel, Switzerland, Poland, Greece, Singapore, India and Indonesia are in the second tier, making it more difficult – though not impossible – to obtain the chips needed for AI research and development. The third tier of countries – China, Iran, North Korea, Russia, Syria and Venezuela – will have the most difficulty obtaining GPUs and CPUs under the new rules if they are applied. Companies such as Nvidia and Microsoft have voiced strong opposition to the proposed export policies in recent months. 'In its last days in office, the Biden administration seeks to undermine America's leadership with a 200-plus-page regulatory morass, drafted in secret and without proper legislative review,' said Ned Finkle, vice president of government affairs at Nvidia early in January. Microsoft later came out swinging against the Biden-era policy as well. 'Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecoms a decade ago,' Microsoft's president and vice chairman Brad Smith wrote on the company's AI blog in February. "This Tier Two status is undermining one of the essential requirements needed for a business to succeed – namely, confidence by our customers that they will be able to buy from us the AI computing capacity that they will need in the future." Last week, while giving congressional testimony alongside other US tech companies about AI, Brad Smith boasted of the UAE's use of the technology to improve life for residents. "We need to bring it to America," he said, referring to a UAE app that uses Microsoft AI technology. Despite the enthusiasm for a potential US-UAE deal, there have also been critics of efforts to revamp the chip export policy. "If computing power is so fundamental to AI, and the US and our allies are at such an extraordinary advantage in the design, production and use of that computing power, then we should be careful where we send this," Ben Buchanan, who served in the Biden administration, said during Johns Hopkins University's 2025 Emerging Technologies symposium. Mr Buchanan also disagreed with the notion that US technology companies like Nvidia were adversely affected by the chip export policies. "The argument was that we were limiting who these US companies can sell these chips to and therefore limiting the revenue of these companies," he said. "Nvidia's stock, prior to the tariffs at least, did very well and they've done just fine, because there's extraordinary demand for AI chips." The Republican-led House Select Committee on China critiqued reports of potential deals with various countries, saying they would lessen potency of the chip export rules. "Reports of new US chip deals with Gulf nations – without a new chip rule in place – present a vulnerability for the CCP to exploit," the committee said in a post on X. "The CCP [Chinese Communist Party] is actively working to indirectly access our most advanced technology. Without a formal AI diffusion rule, deals like this risk creating backdoor vulnerabilities for export control circumvention." Democratic Senate minority leader Chuck Schumer also expressed concern. 'No respected security expert will tell you with a straight face that these advanced chips won't eventually find their way into the AI supercomputers of the Chinese government and manufacturers,' he said on the Senate floor. 'And I'm not the only one worried. It's not just Democrats worried on this. Thank God, the Republican Chair of the House Select Committee on the CCP has expressed similar concerns about these deals.' His floor speech stands in sharp contrast to 2024, when Mr Schumer boasted of UAE-owned semiconductor manufacturer GlobalFoundries announcing a deal in the US. Despite Microsoft and Nvidia pushing for the proposed chip export rules to be largely thrown out, other tech heavyweights, such as US AI company Anthropic, defended the policy as a way for the US to make sure it maintains its AI lead. "In some cases, smugglers have employed creative methods to circumvent export controls, including hiding processors in prosthetic baby bumps and packing GPUs alongside live lobsters," read a policy letter by Anthropic. That letter, however, was deemed fanciful by Nvidia, and caused a war of words between the two companies. Ian Byrne, associate vice president at Beacon Global Strategies, a strategic advisory firm in Washington, said the efforts show that the years of advance work by the UAE and other regional countries are starting to pay off. "AI and the Gulf isn't new – despite the fanfare of President Trump's trip and this being framed as the Gulf's 'AI moment,' this has been in flight for some time," he said. "It's part of the natural progression of the UAE and Saudi Arabia's long-term investments in US emerging tech, both to achieve strategic goals and to reap the benefits of the global economy's increasing adoption of technologies like AI."
CNBC
12-05-2025
- Business
- CNBC
Trump wants to slash U.S. drug prices with 'most favored nation' policy – here's what to know
President Donald Trump on Monday moved forward with a plan to lower U.S. drug costs by linking prices to those paid in other developed countries – a proposal he will have a tough time putting into effect, experts said. Trump signed a sweeping executive order directing several federal agencies to renew that effort to cut prices, called the "most favored nation" policy. It essentially aims to tie the prices of some medicines in the U.S. to significantly lower ones abroad, or what Trump described as "equalizing" prices. He did not disclose which exact medications the order will apply to, but said it will affect the commercial market as well as the public Medicare and Medicaid programs. That's broader than a similar policy proposal from Trump's first term, which was ultimately blocked in court after the pharmaceutical industry challenged it. Trump is taking aim at a longstanding issue that past administrations have also tried to confront: U.S. prescription drug prices are two to three times higher on average than those in other developed nations – and up to 10 times more than in certain countries, according to the Rand Corporation, a public policy think tank. The president claimed the order will help lower drug prices between 59% and 80%, or "I guess even 90%." But health policy experts said it is still unclear how much the policy could reduce prices for patients, how much it will affect drugmakers' profits, which medicines will be targeted — and whether Trump can even put the plan into effect in the first place. Investors seemed to shrug Monday about how much the plan would hit major drugmakers. Shares of Gilead rose 7%, Merck climbed 5%, Pfizer, Bristol Myers Squibb and Amgen climbed more than 3% and Eli Lilly rose more than 2%. JPMorgan analysts on Monday called the policy "challenging to practically implement" because it would likely require congressional approval and could run into legal challenges from drugmakers. Notably, several Republican lawmakers opposed including a most favored nation provision in the major economic policy bill they plan to pass in the coming months. "The road ahead could be muddy," the analysts wrote in a note. While experts backed the idea of lowering prices, they raised doubts about whether other nations and drugmakers will do what Trump hopes to accomplish with the order. "We're unlikely to get the drug companies to voluntarily decrease their prices, and we're not going to get the other countries to voluntarily increase their prices, right?" said Gerard Anderson, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. Trump's order takes aim in part at other countries, many of which have single-payer health systems with more leverage to negotiate down drug prices with manufacturers. In contrast, the U.S. has a patchwork of public and private insurance and partly relies on middlemen to set prices. The president's policy directs the Office of the U.S. Trade Representative and the Department of Commerce to fight what the administration called "unreasonable and discriminatory policies" in foreign countries that "unfairly undercut market prices and drive price hikes in the United States." In a statement on Monday, the pharmaceutical industry's biggest lobbying group, PhRMA, lauded Trump for taking aim at other nations for what they deemed "not paying their fair share." But other countries' governments are simply negotiating within the limits of their national health budgets, not using "unfair" methods like Trump claims, said Lawrence Gostin, a professor of public health law at Georgetown University. He added that they are securing fair prices for their own countries, which "has nothing to do with undercutting the U.S." It's unclear what actions the U.S. could take to force other nations to take action, but Anderson said there is currently no incentive for them to hike their prices. "They have a system that works for them and they get lower prices. Countries like France and Switzerland are all not going to sit there and say, 'Hey, now I want to pay more,'" he said. The pharmaceutical industry would likely want to to see price hikes in countries within the European Union before it voluntarily lowers any drug prices in the U.S., JPMorgan analysts said. That makes other pieces of the executive order appear unlikely to come to pass. Trump's order directs the Health and Human Services secretary to establish a way for U.S. patients to buy their drugs directly from manufacturers at "most favored nation" prices, cutting out middlemen. The order mentions "direct-to-consumer purchasing programs," without further details. His plan also calls for HHS Secretary Robert F. Kennedy Jr. to give drugmakers price reduction targets within the next 30 days, which will open up negotiations with the companies. If "adequate progress" is not made toward those goals within six months of the order being signed, HHS will impose most favored nation pricing on drugs through rulemaking or "other aggressive measures," according to the order. But Anderson said it would likely take far longer for the government and drugmakers to agree on a price. Under a provision of the Inflation Reduction Act, Medicare and drug manufacturers typically take six months to a year to negotiate prices. He added, "Why would any drug company ever lower their prices voluntarily?" Anderson noted that the order did not provide details on the exact actions the administration could take against drugmakers who don't agree, so the incentives are unclear. The Department of Justice and Federal Trade Commission will also take action against "anti-competitive actions" that keep prices high in the U.S., White House officials said. "There will be an expectation that those prices should come down. And then if they don't, we will be looking at our various policy levers that can be used to force those prices down," one official said. 'We absolutely are going to get a better deal.'" The order also directs the Food and Drug Administration to consider expanding imports from other developed nations beyond Canada. Trump signed a separate executive order in April directing the FDA to improve the process by which states can apply to import lower-cost drugs from Canada, among other actions intended to lower drug prices. The Trump administration claims that some drug prices will fall by up to 90% "almost immediately." White House officials also said the administration will have a particular focus on drugs that have the "largest disparities and largest expenditures," which could include popular weight loss and diabetes treatments called GLP-1 drugs. But experts cast doubts on whether the administration can cut prices significantly, as it's still unclear which drugs and nations will be targeted, and whether other countries and drugmakers will comply. "We don't know the list of nations included," said Tricia Neuman, executive director for the program on Medicare policy at KFF, a health policy research group. "Their pricing would make a big difference in what our prices would be, which could then affect access in the U.S." In Anderson's view, the order as written won't be effective at lowering drug prices. "It's a great idea to pay international prices, but it's how you get to implement it. There are no details and ability to effectuate it," he said. Gostin also added that Americans will likely not see lower prices "in the foreseeable future." Still, AARP, which advocates for older Americans, thanked Trump for issuing the order in a statement on Monday. "It's safe to say that we are excited about any attempts to help bring down prescription drug prices," said Leigh Purvis, the prescription drug policy principal in AARP's Public Policy Institute. "This approach is unusually understandable to the public because I think there's a general understanding that America does pay the highest prescription drug prices in the world." She added that the "devil is in the details, and that's what we're looking forward to seeing more of." The pharmaceutical industry has argued that a "most favored nation" policy will hurt its profits and ability to research and develop new drugs. Last week, PhRMA even estimated that Trump's proposal – if applied to the Medicaid program specifically – could cost drugmakers as much as $1 trillion over a decade. But Monday's executive order seems to be "more of a headline risk" than the sweeping shift for the pharmaceutical industry many had feared, BMO Capital Markets analyst Evan Seigerman said in a note on Monday. He pointed to the uncertain path forward for the plan, saying it "could be more rhetoric than actual implementable policy." Seigerman added that Trump appeared to be somewhat sympathetic to U.S. manufacturers, with the president arguing that European nations are not supporting drug research and development due to their lower prices. Anderson said the pharmaceutical industry may be breathing a "sigh of relief today," pending further details on what the administration's retaliatory actions could look like. Trump's order suggests that it is ultimately voluntary for drugmakers to lower prices and, subsequently, profits, so "he did not propose something that is mandatory and really has teeth here." Still, while PhRMA agreed with Trump's decision to target other countries, the group emphasized that "importing foreign prices from socialist countries would be a bad deal for American patients and workers. "It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America – threatening jobs, hurting our economy and making us more reliant on China for innovative medicines," the group said in a statement. Some analysts and experts said Trump could alternatively implement his most favored nation policy through an existing tool to push down drug prices: Medicare drug price negotiations. It's a key provision of the Biden administration's Inflation Reduction Act that gives Medicare the power to negotiate certain prescription drug prices with manufacturers. The federal program is currently in its second ever round of talks with drugmakers. The Trump administration could use the "most favored nation" price for a given drug as the initial offer to manufacturers at the beginning of negotiations, Anderson said. "You'd be starting the negotiation at an even lower price than they have in the past," he said, adding that it would not require any help from Congress. JPMorgan analysts added that "we see a clearer pathway for the administration to implement [the most favored nation policy] at a smaller scale through Medicare IRA price negotiations, where the impact would be limited to a small number of drugs" and make the hit to drugmaker profits more gradual.
Yahoo
12-05-2025
- Business
- Yahoo
Trump signs executive order aimed at slashing prescription drug costs
President Donald Trump signed an executive order on Monday aimed at slashing prescription drug prices in the U.S. that could lead to the capping of prices at a level equivalent to the cost in similar nations. The U.S. has paid more than other similarly wealthy countries for prescription drugs for decades, with a 2024 study conducted by the Rand Corporation, a public policy think tank, finding that Americans in general pay 2.78 times more for prescription drugs than 33 other nations. Under the executive order, Trump will roll out a 'most favored nation' policy which, he hopes, will allow the U.S. to pay for prescription drugs at the same price as 'the Nation at pays the lowest price anywhere in the World.' 'Basically, what we are doing is equalizing,' Trump said during a press conference on Monday. 'We're all going to pay the same.' The executive order directs the Department of Commerce and the U.S. Trade Representative Jamieson Greer to take 'all appropriate action' against 'unreasonable and discriminatory' policies in foreign countries that suppress drug prices abroad, according to a White House official. It also directs Health and Human Services Secretary Robert F. Kennedy Jr. to set 'clear targets' for prescription drug and pharmaceutical price reductions within 30 days. This, Trump hopes, will open a round of negotiations between the agency and the pharmaceutical and prescription drug industries to knock down drug prices. But if nothing comes of those talks, Kennedy will then impose a 'most favored nation' pricing model capping U.S. prices at the lowest rates paid by other similarly wealthy countries. The Food and Drug Administration will also consider expanding drug importation from other countries besides Canada where drug prices are often cheaper, White House officials during a phone call to reporters. The Department of Justice and Federal Trade Commission will enforce anti-competitive actions that contribute to high drug prices in the U.S., White House officials said. The Department of Commerce could also consider export restrictions that enable low pricing abroad, they added. Trump tried to implement a similar policy to lower drug prices during his first term, which was blocked by a federal judge in 2020. This time around, the policy encompasses a broader set of federal actions. Trump said that moves will hopefully knock down drug prices by 59 percent, in a post to the social media platform X. He then added during a press conference Monday that drug prices could be reduced by between '59 and 80 and I guess even 90 percent.' White House officials did not say which drugs will be subject to price cuts under the policy, but said Americans could expect GLP-1 agonists, which include weight loss drugs like Wegovy, Ozempic and Mounjaro to be among those subject to the plan. Last month, the Trump administration rejected a Biden-era plan that would have required Medicaid and Medicare to cover the weight loss drugs, which could have expanded access. The plan would have also potentially saved the federal government about $35 billion over 10 years, according to estimates from The Congressional Budget Office. White House officials said that they expect drug prices to begin to come down almost immediately since they anticipate drug manufacturers will work quickly with the administration to lower costs. 'The president is dead serious about lowering drug prices,' officials said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
12-05-2025
- Business
- The Hill
Trump signs executive order aimed at slashing prescription drug costs
President Donald Trump signed an executive order on Monday aimed at slashing prescription drug prices in the U.S. that could lead to the capping of prices at a level equivalent to the cost in similar nations. The U.S. has paid more than other similarly wealthy countries for prescription drugs for decades, with a 2024 study conducted by the Rand Corporation, a public policy think tank, finding that Americans in general pay 2.78 times more for prescription drugs than 33 other nations. Under the executive order, Trump will roll out a 'most favored nation' policy which, he hopes, will allow the U.S. to pay for prescription drugs at the same price as 'the Nation at pays the lowest price anywhere in the World.' 'Basically, what we are doing is equalizing,' Trump said during a press conference on Monday. 'We're all going to pay the same.' The executive order directs the Department of Commerce and the U.S. Trade Representative Jamieson Greer to take 'all appropriate action' against 'unreasonable and discriminatory' policies in foreign countries that suppress drug prices abroad, according to a White House official. It also directs Health and Human Services Secretary Robert F. Kennedy Jr. to set 'clear targets' for prescription drug and pharmaceutical price reductions within 30 days. This, Trump hopes, will open a round of negotiations between the agency and the pharmaceutical and prescription drug industries to knock down drug prices. But if nothing comes of those talks, Kennedy will then impose a 'most favored nation' pricing model capping U.S. prices at the lowest rates paid by other similarly wealthy countries. The Food and Drug Administration will also consider expanding drug importation from other countries besides Canada where drug prices are often cheaper, White House officials during a phone call to reporters. The Department of Justice and Federal Trade Commission will enforce anti-competitive actions that contribute to high drug prices in the U.S., White House officials said. The Department of Commerce could also consider export restrictions that enable low pricing abroad, they added. Trump tried to implement a similar policy to lower drug prices during his first term, which was blocked by a federal judge in 2020. This time around, the policy encompasses a broader set of federal actions. Trump said that moves will hopefully knock down drug prices by 59 percent, in a post to the social media platform X. He then added during a press conference Monday that drug prices could be reduced by between '59 and 80 and I guess even 90 percent.' White House officials did not say which drugs will be subject to price cuts under the policy, but said Americans could expect GLP-1 agonists, which include weight loss drugs like Wegovy, Ozempic and Mounjaro to be among those subject to the plan. Last month, the Trump administration rejected a Biden-era plan that would have required Medicaid and Medicare to cover the weight loss drugs, which could have expanded access. The plan would have also potentially saved the federal government about $35 billion over 10 years, according to estimates from The Congressional Budget Office. White House officials said that they expect drug prices to begin to come down almost immediately since they anticipate drug manufacturers will work quickly with the administration to lower costs. 'The president is dead serious about lowering drug prices,' officials said.
