Microsoft’s $15.2B UAE AI Deal Tests US Tech Diplomacy
▼ Summary
– Microsoft will invest $15.2 billion in the UAE over four years, including the first shipments of advanced Nvidia GPUs to the country.
– The U.S. granted Microsoft a license to export Nvidia chips to the UAE, positioning it as a regional anchor for American AI influence.
– The investment expands Microsoft’s Middle East presence, following a delayed AI data center project due to previous U.S. export controls.
– Microsoft has accumulated the equivalent of 21,500 Nvidia A100 GPUs in the UAE to provide access to AI models from various providers.
– The company plans to train one million UAE residents by 2027 and establish Abu Dhabi as a regional hub for AI research and development.
Microsoft has committed to a $15.2 billion investment in the United Arab Emirates over the next four years, a landmark agreement unveiled at the inaugural Abu Dhabi Global AI Summit. This strategic move includes the first-ever export of Nvidia’s most powerful GPUs to the UAE, signaling a major expansion of American technological influence in the Middle East.
The United States government has granted Microsoft a special license to ship these advanced Nvidia chips, positioning the UAE as both a testing ground for U.S. export-control policies and a regional stronghold for American AI leadership. This development follows a previous agreement between former President Donald Trump and UAE President Sheikh Mohamed bin Zayed al-Nahyan to construct an AI data center campus in Abu Dhabi, a project that had been stalled due to strict export regulations on the necessary hardware.
In September, Microsoft became the first corporation to receive approval from the U.S. Commerce Department to supply these restricted semiconductors to the UAE. Some critics argue this arrangement could weaken the rationale behind U.S. export restrictions to China by potentially creating indirect pathways through a Chinese ally.
Microsoft stated it undertook extensive efforts to satisfy the rigorous cybersecurity and national security requirements tied to the export licenses. These measures have enabled the company to amass computing power in the UAE equivalent to 21,500 Nvidia A100 GPUs, utilizing a mix of A100, H100, and H200 chips. The company is leveraging this infrastructure to provide access to AI models from OpenAI, Anthropic, various open-source providers, and its own proprietary systems.
The announced $15.2 billion total encompasses funds Microsoft started allocating in the UAE beginning in 2023 as part of a new national AI initiative. Between 2023 and the end of 2025, the company will have deployed just over $7.3 billion in the country. This includes a $1.5 billion equity investment in G42, the UAE’s sovereign AI firm, and more than $4.6 billion in capital expenditures dedicated to data center construction.
Under the new agreement, Microsoft promises to spend an additional $7.9 billion in the UAE from the start of 2026 through the end of 2029. This includes $5.5 billion earmarked for capital expenses to support the ongoing and planned expansion of AI and cloud infrastructure. The company has indicated it will disclose further details about new initiatives in Abu Dhabi later this week.
Microsoft’s engagement in the UAE extends far beyond physical infrastructure. The tech giant is combining its substantial AI resources with significant investments in local talent development, specialized training programs, and robust governance frameworks. It has pledged to train one million UAE residents by 2027 and establish Abu Dhabi as a central hub for regional AI research and model development.
This massive investment coincides with another major commitment from Microsoft, which signed a separate $9.7 billion agreement with Australia’s IREN for AI cloud capacity on the same day.
(Source: TechCrunch)
