- Key Points
- The U.S. currently makes the world’s most advanced semiconductor chips, while the UAE has the abundant, cheap energy to power enormous AI data centers.
- The two countries’ AI alliance has already seen hundreds of billions of dollars in investment between firms like Nvidia, Microsoft, OpenAI, and the UAE’s G42, Mubadala, and MGX.
- The partnership has huge implications for the global AI race, national security, geopolitical power, and competition with China.
UAE President Sheikh Mohamed bin Zayed Al Nahyan (R) welcomes his US counterpart Donald Trump upon arrival at the presidential terminal in Abu Dhabi on May 15, 2025.
DUBAI, United Arab Emirates — Deep within the oil-wealthy deserts of the Middle East, the United Arab Emirates is on a mission to establish supremacy in the field of artificial intelligence.
The United States of America, led by President Donald Trump, needs American companies to win the AI race global seven thousand miles away. While their desires may be separated by way of continents, their goals are strikingly aligned.
The U.S. presently makes the world’s most superior semiconductor chips, even as the UAE and neighboring Gulf international locations have the considerable, reasonably-priced strength needed to support full-size AI records centers. With unheard of fanfare and funding promises, a lot of which had been targeted on technology and AI, Abu Dhabi embraced Trump at some stage in the U.S. President’s go to this month. The two countries have been allies for 1/2 a century.
The ever-increasing AI alliance among the 2 nations, to which loads of billions of dollars have already been committed, is, in the eyes of many traders, monetary leaders, and political powers gamers from Silicon Valley and Washington to Abu Dhabi and Dubai, a fit made in heaven. Myron Xie, an analyst at SemiAnalysis, stated to CNBC, “Energy-rich Gulf international locations join the roster of relied on partners just as U.S. energy grids hit their physical limits.” Xie stated that simultaneously, “the UAE profits get right of entry to advanced computing and expertise, supporting it to pursue its own sovereign AI dreams. “The Middle East, flush with cheap energy and capital, is poised to become the next local AI hub.”
In the UAE, the tendencies are part of a long-term approach by means of the Gulf sheikhdom to place itself as a global leader in AI. This, the United States of America’s leadership holds, will beautify its geopolitical impact, diversify its economy past crude oil dependency, and assert itself as a technological powerhouse.
The aim for Washington is obvious: to make certain American groups lead the worldwide AI race with China and unfold American tech around the sector.
Trump’s Middle East visit in mid-May — which featured stops in Riyadh, Doha, and Abu Dhabi — noticed the assertion of over $2 hundred billion in business offers between the U.S. and the UAE. This delivered a full of funding agreements within the Gulf region, which include those from Saudi Arabia and Qatar, to over $2 trillion.
As a part of the Abu Dhabi deals, OpenAI, Oracle, Nvidia, and Cisco Systems announced that they will assist in constructing the Stargate UAE AI campus, launching in 2026. The Stargate Project is a $500 billion personal area AI-targeted funding vehicle, introduced with the aid of OpenAI in January in partnership with Abu Dhabi funding organization MGX and Japan’s SoftBank.
The businesses stated a preliminary 200-megawatt AI cluster will be released in Abu Dhabi within the next 12 months. And the AI campus deal approach the UAE receives get right of entry to to lots of Nvidia’s today’s chips, American technology, and software program.
It’s the kind of agreement that might have confronted regulations under the previous U.S. Administration, however, Trump has seemed to alter the manner is approaching tech export restrictions.
His administration plans to rescind a Biden administration “AI diffusion rule,” which imposed strict export controls on advanced AI chips even to U.S.-pleasant international locations. Doing away with these limits should open the door for the touchy American technology to come to be inside the hands of opponents like China is the subject of ongoing debate among lawmakers and security professionals in the United States.
‘Compute, not crude’
According to Mohammed Soliman, a senior fellow at the Middle East Institute in Washington, DC, the pillars of the U.S.-Gulf relationship are changing. Previously, the connection turned into normally known as a partnership focused on the purchase of weapons and oil exports. “Compute, not crude, is going to be the valuable pillar of the U.S.-Gulf courting,” Soliman said. “Moving ahead, it’ll not most effective be about electricity coverage; it will be approximately compute and how Gulf and we’re constructing an AI ecosystem that could service 0.33 markets, rising markets,” Compute, inside the context of AI, refers back to the computational assets, like hardware and processing power, needed to teach and run AI models.
Soliman stated on a May 19 Middle East Institute podcast, “And that is a massive inflection factor for the relationship [compared to] where we have been some years in the past.” “The dating goes to have a far more effect than ever earlier than on technical questions about AI, statistics facilities, and chips moving forward.”
Notably, the UAE has wagered fully on a U.S.-led AI future — a specifically salient point inside the context of U.S.-China opposition.
G42, an Emirati AI business enterprise with full-size partnerships with OpenAI and Nvidia, and Microsoft
, to name a few, has divested from Chinese companies, which includes an anticipated $100 million stake in TikTok owner ByteDance — to forestall U.S. Commerce Department sanctions and preserve access to Nvidia chips and different U.S. Era that powers AI packages.
“So a long way right now, we’re racing to have the great large language model and in the long run to have AGI (artificial general intelligence),” stated Baghdad Gherras, a UAE-primarily based challenge associate at Antler, which invests in early-stage AI ventures.
Although definitions range, synthetic intelligence that is smarter than human beings is normally referred to as AGI. “Computer is the first thing that the UAE desires to stabilize if they want to be a leader in the AI race. If you don’t have a computer, you won’t have a seat in terms of AI management,” Gherras informed Expressepaper.
He added that the UAE “determined to re-shift the geo-financial awareness from China to the U.S., because they understood that Nvidia makes, via a long way, the excellent chips for AI, however, also the complete semiconductor deliver chain is in the main in Taiwan.”
China, but “is catching up certainly, speedy, crazy rapid,” as Gherras remarked.
‘Tremendous level of influence’
The UAE’s improvement of its big language model (LLM), Falcon AI, represents a primary step for the country in AI development, but it also offers the inspiration for the USA’s geopolitical and monetary ambitions to dominate the AI marketplace within the next decade.
Such a role might additionally enhance the Emirates’ diplomatic leverage, permitting it to play a extra influential role in global tech governance and policy discussions.
“If those aims grow to be fact, you may see the Gulf acting as a region that gives compute as a carrier for the rest of the rising markets,” the Middle East Institute’s Soliman said.
He went on to mention, “Think of the Gulf as an area that homes large language fashions in Swahili, in Hindi, in these languages. Because they have got the infrastructure, they can provide housing statistics, training information, and inference for a majority of these economies.” “Consequently, they grow to be their AI marketplace chief for rising markets.” “And this is a superb, outstanding degree of effect on, first-rate stage of improvement,” Soliman emphasised. “Where they used to serve as energy producers, to become a back-stop for AI packages — that is certainly, genuinely massive.”
U.S. pushes American AI
Part of the U.S.’s push within the UAE and the wider vicinity comes right down to a preference for the American era to establish supremacy globally and keep off the advances of China.
On the one hand, U.S. Export curbs have limited access for businesses like Nvidia to sell superior products to China. It has also stopped China get right of entry to some areas to improve its progress in areas like semiconductors and AI.
At the same time, Washington is starting up new markets, just like the Middle East, for its biggest tech groups.
The move has political implications because it restricts China at the same time as strengthening U.S. Pc delivery chains. It offers the U.S. an aspect within the AI arms race, positioning the United States of America for continued management,” David Meier, economist at Julius Baer, stated in a note in advance this month.
In order to increase their era’s worldwide reach, in particular in AI-related fields, Beijing and Chinese groups have been attempting to enter new markets. However, the US has been forming partnerships with different governments so that it can establish itself first. “The race is directly to diffuse U.S.-based AI into every part of the arena,” Daniel Newman, CEO of Futurum Group, advised Expressepaper on Tuesday.
American organizations have made the decision. OpenAI, which struck a deal with the UAE last week to construct AI infrastructure and roll out ChatGPT nationwide, has positioned itself as a countermeasure to China and as a commercial enterprise capable of supplying U.S. Artificial intelligence to international locations around the world.
Chris Lehane, OpenAI’s chief worldwide affairs officer, instructed CNBC in February that the enterprise sees two essential AI fashions: one led by way of China’s Communist Party and one led by the United States as a “small d’ democratic” democratic AI. “If you’re a rustic and you’re trying to construct your AI atmosphere, your very own AI hub, you’re constructing developers on your own. USA. That are going to be a few models of the agencies of the destiny, I assume you’ll prefer to be considering that constructed on a democratic AI gadget due to the fact it’s going to help you. The US being capable of using this generation in your nation’s construction functions,” Lehane stated.