US Used Nvidia Chips as Leverage in Armenia-Azerbaijan Talks

By Staff, Agencies

US negotiators used the prospect of access to Nvidia's advanced artificial intelligence chips as an incentive during negotiations that produced a preliminary peace agreement between Armenia and Azerbaijan last year, The Wall Street Journal reported, citing people involved in the talks.

Expanded approvals for chip purchases linked to a major Armenian data center formed part of the incentives offered to Yerevan, providing one of the clearest known examples of what US officials have described as "chip diplomacy."

The Trump administration has also used access to advanced AI hardware in negotiations with the United Arab Emirates and Saudi Arabia.

However, the Armenia case is among the first known instances in which the technology was used as leverage in talks aimed at resolving an armed conflict.

The arrangement also highlighted increasingly close ties between the White House and Nvidia, whose CEO Jensen Huang regularly speaks with US President Donald Trump and advises his administration on AI policy.

Last month, Armenian Prime Minister Nikol Pashinyan joined regional officials and executives from Nvidia, Dell, and other companies at a ceremony marking the Firebird data center project in Hrazdan, around 30 miles from the Azerbaijan border.

The project is expected to cost more than $5 billion and eventually house 70,000 Nvidia AI servers, including Grace Blackwell and Vera Rubin systems, providing around 300 megawatts of computing capacity by the end of next year.

Pashinyan credited Trump with helping make the project possible through a memorandum signed last year to expand US-Armenian technology and trade ties.

The role of the Firebird project in the Armenia-Azerbaijan negotiations has received less public attention.

About a year and a half after Azerbaijan took control of Nagorno-Karabakh, talks between Pashinyan and Azerbaijani President Ilham Aliyev appeared close to collapsing, after more than three decades of repeated clashes that have left nearly 40,000 people dead.