OpenAI has partnered with the United Arab Emirates to launch Stargate UAE, a major data center project in Abu Dhabi under its “OpenAI for Countries” program.

The initiative includes a one-gigawatt AI computing cluster, with 200 megawatts set to be operational by 2026. It will link to a larger five-gigawatt data center in the city.

As part of the deal, all UAE residents will receive ChatGPT Plus subscriptions.

The project is backed by UAE-based AI firm G42, Oracle, Nvidia, Cisco, and SoftBank, with total investments potentially reaching US$20 billion.

This funding will be split equally between the Gulf and US markets. For every dollar invested in the UAE, a matching amount will support US AI infrastructure.

While the US government has approved the deal, there are concerns about sensitive tech transfers due to the UAE’s ties with China.

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🔗 Source: Axios

🧠 Food for thought

1️⃣ UAE’s decade-long AI ambitions culminate in landmark OpenAI partnership

The OpenAI deal represents the culmination of the UAE’s long-term strategic AI investments that began years before the current AI boom.

Dubai declared its ambitions to become an AI leader as early as 2018, establishing initiatives like the Dubai AI Lab and implementing a comprehensive strategy to integrate AI across government services 1.

By 2019, Abu Dhabi had already launched a $250 million tech fund specifically aimed at fostering homegrown startups and reducing reliance on fossil fuels, with $100 million earmarked for direct investments in early-stage tech firms 2.

The UAE’s systematic approach to building tech infrastructure has attracted major investments over time, with the country seeing nearly $320 million invested in tech startups across 110 deals in 2018 alone, double the previous year’s figures 2.

This OpenAI partnership aligns with the UAE’s broader strategy of strategic technology investments, including the development of an Arabic language AI model announced recently, demonstrating the UAE’s commitment to becoming a regional AI leader 3.

2️⃣ Economic diversification drives UAE’s aggressive AI investments

The massive scale of the UAE’s AI investment reflects its broader economic transformation strategy to reduce dependence on oil revenues.

Non-oil sectors now contribute over 75% of the UAE’s GDP, highlighting the successful diversification of an economy traditionally dependent on fossil fuels 4.

The “Make it in the Emirates 2025” event showcased this strategy in action, focusing on smart manufacturing, Industry 4.0, and AI as cornerstones of the UAE’s industrial future 5.

This diversification has made the UAE the largest export market for US goods in the Middle East and North Africa region, with bilateral trade reaching $34.4 billion in 2024 and generating a $19.5 billion trade surplus for the US 6.

The OpenAI partnership builds on the UAE-US Economic Policy Dialogue established in 2012, which has consistently focused on technology and sustainable economic growth as areas for collaboration 4.

3️⃣ US-UAE AI partnership balances strategic competition with security concerns

The OpenAI deal reflects a shifting US approach to technology exports that prioritizes strategic partnerships over restriction.

This partnership follows a recent agreement for the US to export 500,000 advanced AI chips annually to the UAE starting in 2025, signaling a significant policy shift in how the US approaches strategic technology transfers 7.

The deal includes specific provisions to ensure responsible use of exported technologies, addressing national security concerns that have traditionally limited such transfers 7.

The partnership represents a calculated bet that bringing countries “onto the US rails” and into “the US AI system” (as OpenAI’s Chris Lehane put it) will counter Chinese influence more effectively than restricting access to advanced AI technologies.

Recent OpenAI developments

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