G42 Faces an April 2027 Deadline That Could Push It Toward US Ownership

A US Commerce Department rule gives the Abu Dhabi AI group licence-free access to top-end chips only until next April unless it becomes a US company or wins renewed approval, and experts say nobody is sure what that would require.

By Nakoda News Desk

2 days ago·3 min read

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G42, the Abu Dhabi artificial intelligence group chaired by Sheikh Tahnoon bin Zayed Al Nahyan, is facing a question that goes to the heart of the UAE's sovereign AI strategy: whether it must become an American company to keep buying the most advanced US chips. The issue was examined in detail this week by EnterpriseAM, which reported that export-control specialists it interviewed said they had never seen language like the clause at the centre of the debate.

The clause sits in a US Commerce Department rule published in July 2026. According to EnterpriseAM, the rule gives G42, its cloud arm Core42 and eight US companies operating in the UAE licence-free access to top-end AI chips, and moves the UAE into Country Group A:5, the category that includes Washington's closest export-control partners. Other UAE entities still need licences for those chips. For G42 and Core42, the licence-free status expires in April 2027 unless the companies become US companies or obtain renewed approval from Commerce. EnterpriseAM said the rule cites the UAE's cooperation during the US war against Iran.

What Becoming a US Company Could Mean

The rule does not spell out what would count. The experts EnterpriseAM spoke to listed several possibilities: incorporating in a US state, selling a majority stake to an American company, or a middle path such as a ring-fenced unit with a separate US-controlled board. The rule names only G42 and Core42 and says nothing about other group businesses, including Khazna, Presight and Inception.

Sarah Bauerle Danzman of Indiana University and the Atlantic Council described the provision as "really, really strange" and said she did not understand the legal basis for it, according to the report. Andrew Leber of Tulane University and the Carnegie Endowment argued that US ownership would weaken G42's pitch as a provider of sovereign AI, because US companies can be compelled under the CLOUD Act to hand over data.

The question is not new. Bloomberg reported in September that G42 executives had held exploratory talks about selling a majority stake to US companies, with options including bringing in an American majority shareholder or creating a new US-based vehicle. Mobile World Live, citing that report, said no final decisions had been made. The Wall Street Journal has also reported, citing unnamed Emirati officials, that G42 plans to become a US company mostly owned by US investors.

G42 has not confirmed any plan. In a statement quoted by EnterpriseAM, the company said it already has substantial ties to the United States through partnerships, US shareholders and US-based entities, that it will continue to comply with applicable requirements, and that it had no further comment on regulatory or corporate matters at this stage. The Commerce Department's export-control arm did not respond to EnterpriseAM's request for comment.

Why It Matters

G42 is the UAE's flagship AI company. Its existing investors include Microsoft, the US private equity firm Silver Lake and Mubadala, and it is building the 5-gigawatt UAE-US AI Campus in Abu Dhabi using Nvidia chips. Any loss of licence-free chip access would affect that project and the wider plan to make Abu Dhabi a centre for AI computing.

EnterpriseAM set out several possible motives behind the clause without endorsing any of them: rewarding the UAE for its wartime cooperation while keeping the option to withdraw the benefit, keeping leverage over future licence extensions, and extending US influence through ownership at a time when the US government holds stakes in about 40 companies, according to a Cato Institute tally. It also noted that Democratic lawmakers have alleged a link between the original UAE chip arrangements and a $500 million investment in World Liberty Financial by Aryam Investment, which has reportedly been backed by Sheikh Tahnoon. The publication presented this as an allegation, not a finding.

The UAE also has leverage of its own. It has pledged $1.4 trillion of investment in the United States, Microsoft and Silver Lake carry weight in Washington, and UAE investors hold stakes in Anthropic, OpenAI and xAI.

For executives and investors, the issue comes down to a trade-off that EnterpriseAM puts plainly: whether keeping G42 under Emirati control matters more than guaranteed access to top-end chips. With the April 2027 deadline five months away, and Democrats taking control of the US House after this week's midterm elections, scrutiny of Gulf AI deals in Washington looks likely to grow.