Trump is trading US security and economic control for AI deals in the Gulf

By: cryptopolitan|2025/05/16 15:00:13
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According to Bloomberg, President Trump is deep into AI chip deals across the Middle East, but some of his own top officials are warning these moves are putting both national security and economic control on the line. On his trip through Saudi Arabia, Qatar, and the UAE, Trump signed off on multi-billion dollar agreements that would export some of the most advanced US-made semiconductors available, including chips from Nvidia and AMD. Tens of thousands of these chips are going to Saudi Arabia. Over one million are headed for the UAE. These chips are used to train the same kinds of models behind ChatGPT, battlefield systems, surveillance software, and deep-learning infrastructure. This is not normal tech trade. These chips are considered core strategic assets in the global AI race. They are expensive, highly restricted, and in short supply. And while the deals include vague conditions saying China can’t access the chips, multiple administration officials say those restrictions aren’t legally enforceable and could be bypassed easily. Officials push back on David Sacks over security risks David Sacks, Trump’s White House adviser on AI, is helping lead these negotiations, but he’s become a point of tension. Sacks has been open to proposals from Gulf leaders that senior US officials say are clear security threats, including suggestions that would allow the chips to be housed in facilities with ties to Chinese firms. These weren’t added to the final deal, but the fact they were considered has alarmed many inside the administration. Vice President JD Vance tried to reinforce a different message earlier this year at an AI summit in Paris: “The Trump administration will ensure that the most powerful AI systems are built in the US with American designed and manufactured chips.” Some officials say exporting that much chip power anywhere outside the US goes against that mission entirely. Even if the deals go ahead, the US will still hold the majority of global AI computing resources. But for the first time, countries in the Gulf will have serious AI infrastructure powered by elite American hardware, and that changes the map. White House debates slow-roll as UAE eyes OpenAI partnership Inside the White House, some senior officials are allegedly still trying to delay or block the agreements, especially the UAE deal, which may include a large-scale project by OpenAI, the company behind ChatGPT. AI chip shipments to foreign governments must be reviewed by multiple US federal agencies. That’s one route officials are exploring to introduce tighter restrictions. Another is the administration’s new semiconductor export control policy, which is still being written after tossing out President Biden’s old framework. This rewrite could become a tool for inserting stronger protections against Chinese interference. But Sacks and his allies are pushing for more rapid exports with basic safeguards. They argue that if the US slows things down, other countries will just turn to China’s chipmakers like Huawei, who are catching up fast. “We need our friends, like the kingdom of Saudi Arabia and other strategic partners and allies, to want to build on our tech,” Sacks said this week on stage beside Saudi Arabia’s communications minister. He downplayed any risk, adding, “The possibility of that tech winding up in China is not an issue with a friend like Saudi Arabia at all.” Some of the sharpest criticism is now focused on G42, an Abu Dhabi-based AI firm that once had strong ties to Huawei. The company agreed to separate from Chinese providers in 2023 as part of a $1.5 billion deal with Microsoft, but US officials remain skeptical. G42 is now in talks to buy over one million Nvidia H100 accelerators—one of Nvidia’s highest-end products. Security terms in the UAE agreement are still being written by a working group of American and Emirati officials. These include clauses to stop chip diversion to China and prevent remote access by Chinese firms. But officials say Sacks wants to oversee how that fine print is written, something others in the administration are pushing against. While some said he was speaking from a technical angle, others viewed the comment as reckless. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now

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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions

The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.


There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."


Question One: Is this encryption the same as Signal's encryption?


No. The difference lies in where the keys are stored.


In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.


X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.


This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.


The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.


The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.


After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."


From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.


In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.



As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."


Issue 2: Does Grok know what you're messaging in private?


Not continuous monitoring, but a clear access point.


For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.


This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.


There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."


Issue 3: Why is there no Android version?


X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.


In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.



WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.


X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.


These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.


Elon Musk's "Super App"


This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.



X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.


Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.


The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.


X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.


The help page sentence has never been just technical instructions.


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