U.S. Greenlights UAE AI Push to Counter Global Rivals in $15B Pact

The U.S. government has granted Microsoft (NASDAQ:MSFT) export licenses to ship advanced Nvidia (NASDAQ:NVDA) AI chips to the United Arab Emirates, a pivotal step in a $15.2 billion partnership aimed at expanding the UAE's AI and cloud infrastructure. The approval, secured under the Trump administration, allows Microsoft to export the equivalent of 60,400 A100 chips — including Nvidia's cutting-edge GB300 GPUs — to the UAE, enabling the tech giant to accelerate its AI data center expansion in the Gulf, according to a TechBuzz report. This development follows a May agreement between U.S. President Donald Trump and UAE President Sheikh Mohamed bin Zayed al-Nahyan to establish a major AI data center campus in Abu Dhabi, according to an FT report.

Microsoft's investment in the UAE includes a total of $15.2 billion over seven years, with $5.5 billion allocated to AI and cloud infrastructure and $1.5 billion in equity stakes in G42, an Abu Dhabi-based AI company, according to a Newsable report. The project, which had faced delays due to U.S. export controls on high-performance chips, now clears a critical regulatory hurdle. Brad Smith, Microsoft's president, emphasized that the company met "stringent cyber security, physical security, and other security requirements" to secure the licenses, as reported by CNBC. The UAE has long sought to position itself as a global AI hub, leveraging its strategic ties with Washington to access advanced U.S. technology, according to Yahoo Finance.

The U.S. Commerce Department's decision reflects a nuanced approach to balancing national security concerns with technological collaboration. While the Trump administration revised technology safeguards to permit the export of GB300 GPUs, the move underscores Washington's cautious stance on AI chip distribution, particularly in light of geopolitical tensions with China, as TechBuzz reported. Microsoft's prior investments in the UAE, totaling $7.3 billion from 2023 to 2024, laid the groundwork for this expanded partnership, according to Yahoo Finance. The company plans to use the newly approved chips to power advanced AI models from OpenAI, Anthropic, and Microsoft itself, positioning the UAE as a regional leader in AI innovation, CNBC also noted.

The approval has also bolstered investor confidence, with Nvidia shares rising 1.97% in premarket trading following the news, CNBC reported. The deal is expected to fuel broader optimism in AI-driven tech stocks, contributing to a rally in U.S. indices. Meanwhile, the geopolitical implications of the partnership are significant, as the UAE's AI ambitions align with Washington's efforts to counter Chinese influence in the tech sector. G42's collaboration with Microsoft has drawn scrutiny in the U.S. due to the firm's past ties to China, but Smith noted that G42 has made "enormous progress" in implementing compliance measures, Yahoo Finance reported.