US and UAE collaborate on AI megaproject to boost regional innovation

Amid a glittering ceremony at Qasr Al Watan, US President Donald Trump and UAE President Sheikh Mohamed bin Zayed Al Nahyan unveiled a US-UAE pact to build a 10-square-mile AI campus in Abu Dhabi—the largest of its kind outside the US.

The pact, powered by 5 gigawatts of clean energy and driven by the UAE’s G42 and US giants, including AWS, underscores the UAE’s strategic objective to emerge as a global AI leader by 2031.

The project aims to deliver ultra-low-latency compute to much of the Global South, serving nearly half the world’s population.

“The UAE-US AI campus offers organizations in the region a unique opportunity to prioritize low-latency AI use cases and accelerate real-time decision-making,” said Eric Samuel, associate director at IDC. The nuclear-solar-gas power mix guarantees always-on, sustainable compute infrastructure, noted Samuel.

The new “US-UAE AI Acceleration Partnership” aims to deepen bilateral tech cooperation while addressing US concerns over Chinese influence. The UAE has been making moves in AI for a while, like having an AI Minister since 2017 and their own AI university since 2019.

Strategic edge of Gulf AI hub

Spanning 10 square miles, Abu Dhabi’s AI campus aims to become the nucleus of GCC-focused innovation across finance, energy, and healthcare, developing regionally tuned large language models and domain-specific breakthroughs. A dedicated science park will be designed to accelerate R&D, while its hybrid energy mix could offer a sustainability edge.

The UAE has secured access to an estimated 500,000 Nvidia chips annually, according to Reuters — a strategic win following Biden-era export controls. These chips will power applications ranging from AI-driven banking at Emirates NBD to smart city planning for Saudi Arabia’s NEOM, and scalable healthcare diagnostics across underserved regions of the Global South.

Samuel highlighted that the campus’ geographic proximity and clear regulatory framework make it particularly advantageous for AI deployments within regulated industries.

G42’s lead in infrastructure delivery reassures local enterprises on compliance. “G42’s involvement ensures UAE regulatory requirements will be met,” Samuel added. He noted that maturing hybrid and multi-cloud architectures are helping organizations safeguard sensitive workloads and intellectual property within sovereign boundaries.

Competition & geopolitical currents

While US-managed data centers and national security alignment with Washington counterbalance Chinese tech influence —with OpenAI’s Sam Altman voicing support for the UAE’s market-opening strategy — the UAE’s AI ambitions face stiff competition.

Saudi Arabia is deploying a $40 billion AI fund to drive $1 trillion in GDP by 2030. Governments worldwide, including China, are pouring billions into AI to reduce foreign dependencies, protect data sovereignty, and foster local innovation ecosystems.

The UAE’s edge may lie in low-cost clean energy, regulatory clarity, and a sovereign-first posture—especially appealing to emerging markets across the Global South. But structural risks remain. G42’s past ties with Huawei, the presence of Chinese hyperscalers like Alibaba Cloud, and chip smuggling concerns may deter some US-aligned enterprises.

“The UAE’s innovation-led approach and willingness to act as a ‘client-zero’ for bold AI use cases positions it strongly alongside peers like Singapore, China, and Saudi Arabia,” said Samuel. “But success will depend on real-world deployments that become global benchmarks—not just infrastructure.”

Vendor lock-in and integration risks also loom large. “While those are being mitigated through open architectures and API-first strategies, the growing talent gap remains a key challenge,” Samuel noted. A Qlik report shows 31% of UAE businesses cite a lack of AI skills, 27% face inadequate data expertise, and 25% lack robust analytics tools—trends mirrored in Saudi Arabia.

To bridge the gap, enterprises are leaning on consulting partners and IT service providers. “They’re deploying AIOps and partnering on change management to address both skills gaps and operational complexity,” said Samuel. The UAE’s goal to train one million AI professionals by 2027 is a key lever.

For international firms assessing data sovereignty, IP ownership, and cross-border governance under the US-UAE AI Acceleration Partnership, Samuel noted: “UAE-based firms often replicate core IT frameworks in-country while maintaining centralized governance. Supported by modular, cloud-native solutions, this hybrid approach enables both regulatory alignment and operational agility.”

“The opportunity is real—but only if tech leaders pair ambition with execution, infrastructure with trust,” Samuel concluded.