The United States has granted Microsoft permission to export the latest Nvidia chips to the United Arab Emirates, marking a significant step in the Seattle-based company’s multibillion-dollar investment strategy in the Gulf region. This development highlights the escalating competition between Washington and Beijing in the realm of artificial intelligence (AI).
In May, a pivotal agreement was forged between former US President Donald Trump and UAE President Sheikh Mohamed bin Zayed al-Nahyan to construct a sizable AI data center campus in Abu Dhabi. Microsoft’s partnership with the Emirati firm G42 is central to this venture. However, plans for the Abu Dhabi project had been stalled due to the Department of Commerce’s stringent export controls on the powerful Nvidia chips essential for advanced AI systems.
Brad Smith, Microsoft’s president, announced that in September, the company became the first to receive a license from the Trump administration to export Nvidia’s AI chips to the UAE. He emphasized that obtaining such export licenses requires meeting strict criteria set by the US government. “We earned it by satisfying very stringent cyber security, physical security and other security requirements,” Smith stated.
Looking ahead, Microsoft aims to ramp up its investment in the UAE, increasing from $7.3 billion over the past three years to more than $7.9 billion between 2026 and 2029. Of this, $5.5 billion is earmarked for capital expenditure related to AI and cloud infrastructure. Specific details regarding the deployment of the Nvidia chips remain undisclosed.
Previously, Microsoft invested $1.5 billion in G42, which has been instrumental in establishing the Abu Dhabi facility. This partnership is perceived as a crucial element of America’s broader strategy to reinforce ties with the UAE and diminish China’s influence within the region’s rapidly growing AI landscape.
The UAE is heavily investing in AI as part of its economic diversification strategy, positioning the technology at the core of its legislative initiatives. A recent Microsoft survey indicates that the country is emerging as a global leader in AI adoption. Smith has pointed out that the UAE is expected to play a crucial role in spreading AI technology across the “global south,” extending from the Middle East through southern Europe to Africa and East Asia.
However, concerns have been raised regarding uneven AI diffusion, which could exacerbate global economic inequalities. Smith underscored the significance of the competition between the U.S. and China, noting, “People often focus primarily on the race for advanced AI model development. Yet, I believe the race for AI diffusion is perhaps even more critical.”
The new permits enable Microsoft to significantly enhance its AI computing capabilities within the UAE, increasing its potential output fourfold. Smith anticipates the need for additional licenses in the future, asserting confidence in Microsoft’s ability to meet the stringent requirements established by the US administration. “I fully anticipate we will be needing more licences, I would venture within the next six to 12 months, if not sooner,” he said, reinforcing the importance of the burgeoning US-UAE partnership in the global AI landscape.
