The UAE's Quiet Play for AI Power
How one player at the table read all the AI power cards over 15 patient years
Around 2010, while the rest of the world was still arguing about whether smartphones were a fad, a small group of men inside a glass tower in Abu Dhabi started buying things that did not yet make sense.
The United Arab Emirates has assembled four heavy-hitting, foreign-policy relationships: Washington, New Delhi, Tel Aviv and Beijing into a single working system that the artificial intelligence economy now physically depends on.
Every other country chasing the same role has, at most, two of those relationships.
Most have one.
Take Saudi Arabia, which has the money. Or Singapore, with the neutrality. Ireland has the legal framework. I could keep going for a while.
But the UAE has all of it at once, and it’s been quietly delivering against the plan while everyone else has been holding press conferences. The best part is that you're about to step inside what the Western press has not even noticed yet.
And by the time it does, the concrete will already be poured.
A short tour of why this even matters
Before going further, here is the thing about modern AI that most casual observers do not yet understand: it is a heavy industry now. The cute years are over. “AI is a bubble” used to be a surefire click in the first half of the 2020s.
Not anymore.
The main problem is that training a frontier AI model, like ChatGPT, or Grok, or Claude, requires a building roughly the size of a shopping mall, packed wall to wall with specialized computer chips, cooled by enough water and electricity to power a small city.
These buildings are called data centers. The most advanced ones are called AI campuses. They cost tens of billions of dollars each, take years to build, and consume gigawatts of electricity, where one gigawatt is roughly the output of a full nuclear reactor.
This means the AI race is no longer really about who has the smartest software engineers. The software is converging and turning into a commodity, while the infrastructure they run on is turning into the real moat. (I suggest you also read my briefing Why Compute Is the New Oil)
The infrastructure dilemma includes 1) chips, which are made almost exclusively by Nvidia in the United States and TSMC in Taiwan, and 2) electricity in industrial quantities, which poses its own problem.
But the actual strategy is figuring out the political relationships to keep both flowing, in a world where the United States is choking China’s chip access, China is hoarding the metals that go into the chips, and almost every country in between is being asked to pick a side.
The country that puts those three things together first, wins the decade in front of us.
And this is where the UAE comes in…
What the construction site actually looks like
In May 2025, on the margins of Donald Trump’s tour through the Gulf, the United States and the UAE signed a framework that authorized the export of up to five hundred thousand of Nvidia’s most advanced chips to the UAE every year through 2027. To put that number in scale: that is more high-end AI chips than most nations on earth will ever see in total, going to a country of around eleven million people, every twelve months, for three years.
Twenty percent of the chips were earmarked for an Abu Dhabi-based AI champion called G42. The remaining eighty percent went to American technology giants: Microsoft, Oracle, Nvidia and OpenAI, to operate inside the UAE.
Alongside the chip framework, the same trip announced Stargate UAE: a five-gigawatt artificial intelligence campus in Abu Dhabi, built by G42 in partnership with OpenAI, Microsoft, Oracle, Cisco, Nvidia, and SoftBank. Five gigawatts is roughly the electricity demand of the entire city of Boston. The campus covers ten square miles, which is about nine times the surface area of Monaco. It is the largest AI facility being built anywhere outside the continental United States.
By the end of last year, the chairman of Mubadala, the UAE sovereign fund that helped seed G42, was telling an audience at the Milken Summit that the project had gone “from five kilometers per hour to two hundred and fifty.” The CEO of G42 told reporters in January that there were already more than seven thousand workers on site, with a hundred cranes in the air and steelwork weighing one and a half times the Eiffel Tower. The first two hundred megawatts come online this autumn. The full first gigawatt finishes within three years.
Meanwhile, the European Union is still figuring out how long its list of AI regulations should be.
The American relationship
A short history of G42 helps explain why the American relationship matters so much. As recently as 2023, Congress was sending letters about G42’s links to Chinese companies: Huawei in telecom hardware, ByteDance in social media. By February 2024, every one of those links had been removed. The ByteDance investment was sold. The Huawei equipment was physically pulled out of the UAE’s data centers and replaced with American hardware. The CEO of Microsoft’s regional operations took a board seat. Microsoft itself put one and a half billion dollars on the table.
What replaced the old setup is something the American government had been hoping to design for years and had never managed to build elsewhere: a verifiable system for moving frontier AI technology to a foreign partner with cryptographic tracking on every chip, end-user verification on every workload, and a compliance regime that satisfies American security agencies. The framework now has its own name: the Regulated Technology Environment, and is being held up in House Foreign Affairs Committee testimony as the model the rest of the world should adopt.
The capital side moved at the same speed. The Mubadala-backed AI fund called MGX joined a partnership with BlackRock, Microsoft, Nvidia, and Elon Musk’s xAI to build AI infrastructure across the United States and allied countries. In October 2025 that partnership took private a company called Aligned Data Centers for forty billion dollars. It was the largest data center deal ever made. Inside that single year, Mubadala alone deployed roughly five billion dollars into AI investments, more than any other government-controlled fund anywhere on earth.
The Indian relationship
In a Mumbai banquet hall in September 2024, G42 announced that it was going to build two gigawatts of data center capacity inside India. To put that into context, two gigawatts was roughly twice India’s entire existing AI compute capacity at the time. At the same event, G42’s research arm released a thirteen-billion-parameter Hindi-native AI model called NANDA. Prime Minister Modi had personally signed the framework agreement during his earlier UAE visit.
The relationship runs much deeper than any single deal. There are roughly four million Indian nationals living in the UAE, which is about thirty-eight percent of the population. They run the country’s tech sector at the staff level, the engineering level, the small-business level. The two countries share a free-trade agreement that has been in effect since 2022 and covers more than a hundred service categories, including digital services and computing.
There is also a corridor under construction called the India-Middle East-Europe Economic Corridor. It froze during the Gaza war and was restarted by Modi’s speech to the Israeli Knesset in February. Today, with the Strait of Hormuz periodically blocked by the ongoing war with Iran, that corridor is being actively used as a shipping bypass. It is the only land-and-sea route from India to Europe that does not run through hostile water.
What India does not have is a domestic chip manufacturing base or an ally that can route Nvidia’s frontier silicon to it through legal channels at scale. What the UAE has is exactly that.
Every one of the next billion compute users coming online in South Asia will, in some practical sense, be sitting downstream of an Abu Dhabi data center decision.
The Israeli relationship
The Abraham Accords — the 2020 normalization agreements between Israel and several Arab states — were widely expected to fall apart in October 2023.
Spoiler alert: They didn’t.
UAE-Israel trade reached three and a half billion dollars in 2025. Cross-border private technology investment rose four hundred and thirty percent year over year. The Israeli defense company Elbit Systems signed a two-point-three-billion-dollar air-defense contract with the UAE late last year, with technology transfer phased in over eight years. The Mohamed bin Zayed University of Artificial Intelligence runs a joint research program with Israel’s Weizmann Institute. Early-warning radar data flows in both directions on a hardened technical bridge.
This held through a war. It held through the Hamas attack, the Gaza campaign, the regional escalation, and the current Iran war. The relationship survived because senior people on both sides treated it as infrastructure rather than ceremony: quietly, technically, and without the public optics that would have forced one side or the other to break.
The Chinese relationship
This is the piece most American analysts get wrong, because they read the headlines about chip controls and assume that the UAE picked a side. The UAE did not pick a side. The UAE built a wall.
G42, the AI vehicle, is firewalled from the Chinese technology stack at every layer the Americans care about. Everything else in the relationship is intact and working. UAE non-oil trade with China crossed one hundred billion dollars in 2024. ADNOC, the UAE’s state oil company, ships roughly seven hundred thousand barrels of crude per day to China, which amounts to about six percent of all Chinese seaborne crude imports. The Chinese state oil companies retain stakes in UAE oil concessions. The terminal at Khalifa Port is operated by COSCO, the Chinese state shipping line. The chairman of Mubadala — the same Mubadala that runs MGX, the same MGX that just bought a forty-billion-dollar American company, sits on the advisory board of Tsinghua University’s School of Economics. He also serves as the UAE’s special envoy to China. In April, the next ruler of Abu Dhabi flew to Beijing personally.
This is what an actual geopolitical hedge looks like when adults are running it. The Chinese understand exactly what is happening at G42. The Chinese have not retaliated, because the rest of the relationship is worth keeping. When Iran threatened to escalate this spring, China’s foreign minister publicly urged Tehran to “pay attention to its neighbors’ reasonable concerns”. A quiet message that Beijing values Gulf energy stability over solidarity with Iran. The UAE bought that posture, in part, by keeping the door open everywhere else.
This is the trick. This is the trick that nobody else can do, and many, many have missed.
Why nobody else can copy this
Saudi Arabia is the country most often mentioned as a competitor and is in many ways an admirable one. Its sovereign fund is large. Its AI vehicle, called HUMAIN, is now on the field. It has launched serious technology partnerships with serious American companies. The reason it cannot replicate the UAE stack is mostly about timing. The UAE began this work fifteen years ago, when nobody was watching. Saudi began three years ago, when everybody is. That gap matters because the diplomatic relationships that hold the alliance stack together cannot be acquired with capital. They have to be built across decades, through small consistent gestures, through patient envoys, through universities that send their best graduates to study in each other’s countries. The UAE did that. Now Saudi is doing it. The work is real, and the gap is real, and both things can be true.
Singapore is a hub, but it is small and has no comparable energy base. Ireland has the legal scaffolding for data residency, but it froze its data center permits in 2022 because the national grid cannot support the load. Nobody else is even in the conversation.
The two pillars under the spine
The four-arrow alliance is the spine of the strategy. It rests on two pillars that the Western press routinely mistakes for the strategy itself.
The first pillar is capital. The Abu Dhabi sovereign cluster — the funds called ADIA, Mubadala, ADQ, IHC, and MGX — manages somewhere around two and a half trillion dollars. That is roughly the gross domestic product of France. These funds are coordinated through a council called the Artificial Intelligence and Advanced Technology Council, with weekly decision authority sitting inside a room of perhaps five men. Capital with that kind of governance and that kind of horizon does things American private capital structurally cannot. It funded a sixteen-year nuclear power program, the Barakah plant, that is now generating a quarter of the UAE’s electricity carbon-free. It funded a fifteen-year semiconductor company, GlobalFoundries, that is now critical to the American chip supply. It funded a twenty-year renewable energy company, Masdar, that is now the biggest single foreign investor in American clean power.
The second pillar is energy, and the man speaking publicly about it most consistently is Dr. Sultan Al Jaber, who is the UAE’s Minister of Industry, the chief executive of ADNOC, and the chairman of XRG, ADNOC’s international energy investment arm. At the Atlantic Council Global Energy Forum in June 2025, he said the relevant sentence: “The race for AI is not just about code. It’s about gigawatts.” The UAE has Barakah, delivering five point six gigawatts of carbon-free baseload. It has Masdar’s domestic and international solar deployments. It has natural gas at the wellhead. It has a permit-to-power timeline of under two years for new compute capacity, against three years and counting in the United States and a permit freeze in Dublin. While other countries debate, the UAE pours concrete.
The closing signal
In December 2025, the UAE and Israel founded a framework called Pax Silica — a trusted-supply-chain agreement for advanced AI chips, with cryptographic verification and reciprocal commitments. The United States joined as a senior partner. In February of this year, India joined as the fourth founding signatory.
Stop and look at that list. The United States. The UAE. Israel. India.
Those are the four arrows of the alliance stack, no longer four separate bilateral relationships, now joined into a single supply-chain architecture for the most strategically important industry of the century. The UAE is the central routing node. This is what fifteen years of patient diplomacy looks like at the moment of execution.
The Western press is still asking whether the UAE belongs in the AI race at all; the question they should be asking is whether anyone running the AI race can afford not to route through them.
The chips, the gigawatts, and the alliances are the three things. The chips are mostly settled. The alliances are mostly built. Which leaves one variable still moving fast enough to forecast against, and that is where the next two years are going to be won or lost: