UAE bolsters economic ties with US by joining AI supply chain program

By Rachna Uppal

ABU DHABI, Jan ⁠14 (Reuters) - The United ⁠Arab ‍Emirates on Wednesday joined a U.S.-led initiative to secure AI and semiconductor supply chains, dubbed Pax Silica, further strengthening economic ties with the United ‍States.

The programme is a key pillar of the Trump administration’s economic ​statecraft strategy to reduce dependence on rival nations and strengthen cooperation among allied partners.

The group also ​includes Australia, Britain, Israel, Japan, Qatar, Singapore and South Korea.

"Ultimately we want to focus on the arteries of the supply chain, primarily logistics, the muscle of the supply chain, via industrial capacity, ​and the fuel of the supply chain, primarily capital and energy," U.S. Undersecretary of State for Economic Affairs Jacob Helberg told Reuters.

"And we view the ​UAE as a comprehensive partner that can make meaningful and important contributions in all three of those areas."

Helberg ‌invited the UAE on behalf of President Donald Trump and Secretary of State Marco Rubio to a ministerial level meeting on critical ​minerals in Washington next month, which he said ⁠would include a "large group" of countries.

The UAE has been spending billions of dollars to become a global AI hub, looking to ‌leverage its strong relations with Washington to secure access to U.S. technology, such as some of the world's most advanced chips.

It has also signed a multibillion-dollar deal to build one ‌of the world's largest data centre hubs in Abu Dhabi with U.S. technology.

Asked whether Trump's threat ‌to impose a 25% tariff on U.S. trade by countries - a group including the UAE - that do business with Iran would affect the U.S.-UAE relationship, Helberg said he was "very confident in the strength ‍and depth of America's relationship with the UAE".

While Gulf neighbour Qatar is part of the Pax Silica programme, regional heavyweight Saudi Arabia, ⁠which also harbours ambitions to evolve into a global AI hub, is not.

Helberg said he held an initial round of discussions with Riyadh on Tuesday but that the U.S. and Saudi Arabia had also already negotiated a very substantial bilateral AI deal.

(Reporting by Rachna Uppal; editing by Mark Heinrich)

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