The US Used Nvidia Chips as Incentive in Armenia-Azerbaijan Peace Deal
The Wall Street Journal reports that US negotiators offered expanded approval for Nvidia chip purchases as an inducement in the preliminary Armenia-Azerbaijan peace agreement. The data centre those chips were destined for opened in Hrazdan last month, and we covered it without knowing its purpose.
September 6, 2026 – 3:34 pm
Launch of Firebird’s AI Factory in Armenia
Credit: Nvidia
When Armenia unveiled the biggest AI factory in its region last month, we termed it as compute diplomacy. The Wall Street Journal now reveals what that compute actually secured.
According to Robbie Whelan’s report on Friday, US negotiators utilized the promise of access to Nvidia’s AI chips to facilitate a peace deal between Armenia and Azerbaijan. This agreement was reached last year. His sources are individuals involved in the negotiations.
The specific inducement was extended approval for chip purchases for an Armenian data centre project, a detail previously unreported. The Journal describes this as one of the most notable instances of chip diplomacy to date.
We reported on the construction of Firebird’s facility in Hrazdan without knowing its intended use.
The facility opened in August, presented as the largest AI factory in the region at its unveiling ceremony with Prime Minister Nikol Pashinyan and technology leaders in attendance.
A Licence as a Diplomatic Tool
Advanced Nvidia processors are subject to export controls. Purchase by entities outside a select group of trusted nations requires approval from the US government, which is discretionary.
This makes an export licence akin to a visa, negotiable without legislative action or financial investment. Hence, it serves as a powerful diplomatic instrument. A nation aspiring to host AI infrastructure cannot secure its desired hardware if the licence remains denied.
Firebird’s Prior Involvement in Kazakhstan
Firebird is not a random participant in this pattern. In June, Kazakhstan signed a $10bn agreement with Firebird to construct Data Center Valley. This project mirrors the current scenario in Armenia, involving the same Nvidia-backed developer and similar infrastructure model, albeit in another post-Soviet nation.
Read together, these developments suggest Firebird as more of an instrument than a data centre company operating in challenging locations. American chips arrive under licence in these countries, accompanied by US diplomacy.
The Gulf Collaboration
Washington has previously employed this same leverage mechanism elsewhere, as we have reported. For instance, Abu Dhabi AI firm G42 is exploring the sale of a majority stake to American companies to secure chip access beyond April 2027. This transaction, as reported on Thursday, is a reversal of ownership structure for the purpose of continued procurement.