The UAE and US elevate tech to a cornerstone of their relationship

There are two Middle Easts. One is the Middle East dominating the headlines with stories of conflict and turmoil. The other draws less attention except among a smaller group of Middle East observers: despite its political and security problems, the region is also increasingly at the forefront of a technological revolution, particularly within the artificial intelligence (AI) ecosystem. Thus, it should not come as a surprise that when President Mohamed bin Zayed Al Nahyan (MbZ) of the United Arab Emirates visited the White House on Sept. 23, the joint US-UAE statement was one of the most extensive yet, covering pledges to cooperate on nearly every technological sector and signaling a clear goal to shift the bilateral relationship away from hydrocarbons.

During his multi-day trip to the United States, MbZ also pointedly met with chief executives from Microsoft, Nvidia, and BlackRock, none of whom represent oil companies. This sent a strong message: the UAE no longer wants to be seen as preoccupied solely with oil and natural gas. The energy economy is now just one pillar of the Emirati model. This transformation reflects similar shifts across the Gulf states, particularly in Saudi Arabia, marking a new phase in their relationships with Washington, in which the emphasis is increasingly placed on technology and economic diversification.

For the UAE, in particular, this transformation reflects the journey the country has embarked on over the last two decades to build out its non-oil economy and position itself as a global destination for high-technology, manufacturing, finance, and tourism — especially by actively incentivizing international companies to choose Dubai when establishing headquarters for their regional and emerging markets offices. Abu Dhabi has expanded on this approach by building a tech ecosystem of its own, which today includes successful AI companies like Group 42 (G42).

The tech ecosystem has also been strengthened by investments made by Emirati sovereign wealth funds such as the Abu Dhabi Investment Authority (ADIA) and Mubadala. For example, in August 2024, ADIA was named as one of the investors in US travel tech firm Flyr’s $295 million capital raise. Furthermore, MGX, a UAE state-backed technology investment company, participated in a multibillion-dollar funding round for OpenAI. The UAE’s status as a tech leader rather than only an investor has been further cemented by the release of several Emirati large language models (LLMs), which have become a key facet of the AI race. Natively developed LLMs like Jais (English and Arabic), Falcon 2 (multilingual — English, French, Spanish, German, and others), and most recently NANDA (Hindi) bring credibility to the country’s status as a global AI leader, especially because of the inclusion of languages that historically have been less represented in the tech space.

Simultaneously, the UAE is trying to utilize its energy surplus to position itself as a hub for data centers that are needed for LLMs to function. Shortly before the Emirati president’s visit to the White House last month, BlackRock, Global Infrastructure Partners (GIP), Microsoft, and MGX (led by Sheikh Tahnoon bin Zayed) announced the Global AI Infrastructure Investment Partnership (GAIIP) to invest in new and expanded data centers and energy infrastructure, addressing the growing demand for computing power and creating new sources of electricity for these facilities. And even beyond data centers, the UAE is positioning itself in the so-called deep tech ecosystem. Global tech giants Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung have been in talks with the UAE to explore building mega-factories in the Emirates, which would provide the UAE with an invaluable domestic source of chips.

The UAE has also been solidifying its reputation as an emerging space player. The Hope Mars Mission of 2021, also called the Emirates Mars Mission, was the first spacecraft from the UAE Space Agency (UAESA) to travel beyond Earth orbit. It made the UAE the first Arab country and the fifth overall to reach Mars, as well as only the second (after India) to reach the Red Planet on its first try. In August, the UAESA also became a signatory of the Artemis Accords, a set of statements, spearheaded by the US, laying out common principles, guidelines, and best practices that apply to the safe exploration of the Moon and beyond. In doing so, the UAE signaled to the international community that it would be an active participant in space-related global governance.

It makes sense that for MbZ, who was the first Emirati president to visit the US, tech has been a central piece of engagement with President Joe Biden. Recently, though, growing fears in the US Congress about intellectual property (IP) leakage to China have created some hurdles to tech collaboration. For example, Microsoft’s $1.5 billion deal with G42 elicited extensive concern about potential Chinese espionage, prompting the two companies to scale back their partnership. However, it seems that the UAE has successfully addressed some of these IP concerns, as indicated by the recent approval by the US government of the sale of Nvidia’s cutting-edge H100 AI chips to G42. The US-UAE collaboration via Microsoft and G42 has also manifested into a third-party opportunity, with the two companies now operating in Kenya to support East Africa’s digital transformation. Their $1 billion investment package includes building a geothermal-powered data center, broadening internet connectivity across the country, opening a new cloud region in East Africa, and launching the East Africa Innovation Lab in Nairobi to help startups, entrepreneurs, companies, and organizations implement cloud and AI services. The US and the UAE are also collaborating in a broader sense to support Africa’s transition away from hydrocarbons, especially through the US-UAE Partnership to Accelerate Clean Energy (PACE).

The evolution of US-UAE relations reflects a shift from traditional energy-based ties to a dynamic partnership centered on technology and innovation. This shift signifies a long-term strategy by the UAE to diversify its economy and become a driving force in emerging sectors, solidifying its role as a crucial partner for the US in technology and beyond as well as a global tech leader in its own right.

 

Mohammed Soliman is the director of MEI’s Strategic Technologies and Cyber Security Program and a member of McLarty Associates’ Middle East and North Africa Practice. His work focuses on the intersection of technology, geopolitics, and business in the Middle East and North Africa.

Photo by Kevin Dietsch/Getty Images