Good morning, friends, and welcome to another busy news day. We’re going to dive right in.

UP FIRST- Are we really doing this again? Bloomberg reports that the United States is once again looking into whether to limit sales of advanced AI chips to our part of the world. “Officials are focused on [Gulf] countries that have a growing appetite for AI data centers,” the business information service writes, citing unnamed officials it says have knowledge of the matter.

The caveat: “Deliberations are in early stages and remain fluid,” Bloomberg adds.

We thought we were largely done with this? After a brief spell of tension over AI and chips earlier this year, National Security Advisor Sheikh Tahnoon and his US counterpart, Jake Sullivan, said in a statement last month that Abu Dhabi and Washington “look forward to deepening collaboration across AI and related technologies to propel their strategic partnership forward … underpinned by a shared commitment to safe, secure, and trustworthy AI.”

Background: The US already maintains some limits on exports of chips with AI applications to more than 40 countries in the Middle East, Asia, and Africa on fears that they could be re-exported to China.

MEANWHILE- $WAP-USD cross trades, anybody? The crypto press is abuzz this morning with an unconfirmed report that the UAE Securities and Commodities Authority has asked the US securities regulator to join an investigation into allegations that singer Cardi B is promoting a meme token known as $WAP in what amounts to a pump-and-dump scheme. The source of the excitement is a letter posted on X by a UAE-based venture capitalist — you can read the letter here (pdf), with the caveat that the SCA has not yet confirmed that any of this is real.

AND- By the numbers: DIFC added 5k new jobs last year.

WEATHER- ☀️ We’re in for a warm day in Dubai and Abu Dhabi, with the mercury reaching 37°C before cooling to an overnight low of 28°C in both emirates.

WATCH THIS SPACE-

Emirates is gearing up for “serious conversations” with Boeing after the latest setback in the delivery of the widebody 777X, now delayed to 2026, Bloomberg reports, citing remarks by Emirates President Tim Clark, who expected to take first deliveries in 2020. The delay has forced Emirates into “expensive amendments” to its fleet program, including a costly retrofit of its existing Airbus jets to keep them operational until the new planes arrive. Clark’s fleet plan includes both the 777X and Airbus A380 double-deckers.

REFRESHER- Boeing has delayed the 777X delivery multiple times, most recently in July. Following the July schedule, Clark said that he “would not take kindly” to further delays caused by a growing backlog of orders, and that he doesn’t expect Boeing’s 777X aircraft to enter commercial services before 2026.

PUBLIC SERVICE ANNOUNCEMENT-

Companies are off the hook for submitting economic substance reports for financial years that end after 31 December 2022, Wam reports. The finance ministry scrapped the requirement as part of amendments tied to the UAE's federal corporate tax overhaul. Businesses still need to fulfill compliance obligations for previous years, which include responding to regulatory inquiries and settling any outstanding penalties.

Economic substance explained: Back in 2019, the UAE rolled out economic substance regulations to ensure that businesses have a genuine economic presence and operations in the country before they can take advantage of its low tax environment.

HAPPENING TODAY-

#1- Gitex Global continues today and runs through to Friday at the Dubai World Trade Centre and Dubai Harbor. The event gathers leaders from large tech firms, as well as government representatives, emerging startups, investors, and corporate buyers to showcase the latest innovations in technology, including AI, cybersecurity, and cloud computing.

#2- Happening alongside Gitex is Expand North Star, which kicked off on Sunday and runs until Wednesday at the Dubai Harbor. The event will also include an AI startup competition — DMCC x AGCC: Global AI Challenge - Sustainability Edition — to identify innovative AI solutions that contribute to sustainability in the GCC region.

Fintech Surge is also taking place alongside Gitex, bringing together over 12k investors and 100 exhibitors, serving as a platform for fintech firms to showcase their innovations. The Future Blockchain Summit is also taking place as part of the event until Wednesday.

#3- The IEEE /RSJ International Conference on Intelligent Robots and Systems (IROS2024) began on Monday and runs till Friday at Adnec Center Abu Dhabi — its first time in the Middle East. Hosted by Khalifa University of Science and Technology, the annual robotics conference will be attended by researchers, academics, and global industry professionals.

DATA POINTS-

#1- Dubai Internet City saw 10% y-o-y growth in registered companies in 1H 2024, executive vice president of commercial and Dubai Internet City managing director Ammar Al Malik told CNBC Arabia on the sidelines of Gitex Global (watch, runtime: 2:18). Notable firms opening in the city this year include Hisense, which launched its R&D center last month, and US-based Salesforce.

Tecom is poised to reveal strategic partnerships between Dubai Internet City and both South Korea and India, among others, according to Al Malik. The partnerships come as part of Tecom’s efforts to attract more investors to the set up shop in the city.

#2- More people are stopping over in Abu Dhabi: Etihad Airways’ Abu Dhabi Stopover program welcomed 24k international visitors in 1H 2024, up 242% from 7k visitors in 2H 2023, according to the Abu Dhabi Media Office. The initiative is on track to hit its targeted 75k international stopover visitors for 2024, Etihad Airways CEO Antonoaldo Neves said.

THE BIG STORY ABROAD-

It’s a busier-than-usual Tuesday in the international press, so let’s jump right in with no further preamble:

#1- Canada expelled five Indian diplomats (including New Delhi’s high commissioner to Ottawa), prompting India to PNG six Canadians just hours later as a diplomatic rift between the two deepened. Canada’s soon-to-depart charge d'affaires in New Delhi said “Canada has provided credible, irrefutable evidence of ties between agents of the government of India and a murder of a Canadian citizen on Canadian soil.” The story leads front pages on both sides of the Atlantic (New York Times | Financial Times | Reuters | BBC)

Further reading: How geopolitics caught up with Canada in the FT.

#2- The price of oil dipped nearly 3% overnight after a Washington Post report that Israel will not target Iran’s oil infrastructure in retaliation for Tehran’s 1 October missile strike. Benjamin Netanyahu is said to have told the White House Israel will attack only “military targets.”

MEANWHILE- Israel killed at least 21 people in an airstrike on northern Lebanon, BBC reports.

#3- Britain is prioritizing trade talks with GCC countries and India, the UK’s Business and Trade minister said yesterday. Talks between Britain and the GCC countries are set to resume next week, he said. Reynolds was in our part of the world last month to kickstart the talks.

#4- And the Nobel goes to… Three researchers who have focused on how colonial legacies impacted the relative prosperity of colonized countries shared the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. “Their research also indicates that more economically inclusive and politically democratic systems prove more conducive to technological innovation and long-run growth,” the FT noted. Check out the original announcement here.

OTHER NEWS worth knowing about on this busy morning:

• Google has ordered up to seven so-called “small modular” nuclear reactors to fire up its data centers as part of its AI growth plan. It’s thought to be the first-ever order for small modulars placed by a corporation.
• The latest in the US election: The Donald and Kamala Harris were in Pennsylvania overnight (it’s a key battleground state) and Harris has agreed to a sitdown with Fox News. There are 20 days left until Americans go to the polls.
• Did Elon fake part of his March of the Droids? “Tesla used humans to remotely control some capabilities of its Optimus robot prototypes at a recent event designed to generate investor enthusiasm for forthcoming products,” Bloomberg writes.

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MARKET WATCH-

Opec+ trims oil demand growth forecast: The group of oil-producing nations now sees global demand rising 2% y-o-y — or 1.9 mn bpd — in 2024 — that is 106k bpd less than September estimates, according to the group’s monthly oil market report (pdf). This is the third month in a row that Opec+ revises down its outlook for global oil consumption, according to Bloomberg. “The forecast for world oil demand growth in 2025 is also revised down by 102 bpd to 1.6 mn bpd y-o-y.”

Demand could drop even lower: The business news information service said that the last revision is still well above the estimates of Wall Street banks — and at the top end of the range expected by Aramco.

The regional outlook: Oil demand in the Middle East is expected to grow by 265k bpd iy-o-y n 4Q, and 200 bpd y-o-y in 2024 to average 8.8 mn bpd, fueled by steady economic activity, robust air traffic and the return of expat workers. The outlook for 2025 shows an additional 249k bpd of consumption growth, primarily from Iraq, Saudi Arabia and the UAE, with total regional demand projected to hit 9.1 mn bpd next year.

A snapshot of July figures: Oil demand in the Middle East surged by 304k bpd in July, up from 196k bpd y-o-y in June, “largely supported by the ‘other products’ category and residual fuel demand for electricity generation in the hot summer season, mostly from Saudi Arabia.”

WATCH OUT TODAY for the IEA’s October report, due out later this morning.

CIRCLE YOUR CALENDAR-

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.