The first phase of the “Stargate UAE” AI data center in Abu Dhabi is set to begin operations in 2026.

The project, developed by UAE state-backed firm G42, will initially feature a 1-gigawatt facility spanning 10 square miles and eventually host 5 gigawatts of capacity.

The first 200 megawatts will come online using Nvidia’s advanced Grace Blackwell GB300 systems.

The project includes collaboration with US companies OpenAI, Oracle, Nvidia, and Cisco Systems, as well as Japan’s SoftBank Group.

Estimates suggest the facility will incorporate around 1,400 servers with about 100,000 Nvidia chips.

The US Commerce Department will work with the UAE to ensure compliance with US security standards.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ UAE data center represents a significant portion of surging global AI infrastructure demand

The planned 5GW Abu Dhabi facility highlights the extraordinary scale of energy requirements for advanced AI infrastructure.

Global data center energy demand is projected to double by 2028, reaching 100 gigawatts total, with AI workloads driving much of this unprecedented growth1.

For context, the International Energy Agency reported that all data centers globally consumed 460 TWh of electricity in 2022, a figure expected to double by 2026 primarily due to AI compute requirements2.

The UAE project’s first phase alone will consume 1 gigawatt when completed in 2026, representing a meaningful portion of this global expansion and signaling how concentrated AI compute capacity is becoming.

This power-intensive infrastructure reflects a broader industry trend where data center construction is contributing 10-20 basis points to U.S. economic growth according to J.P. Morgan estimates3.

2️⃣ Export control policy shift reflects deepening UAE-US strategic technology partnership

The Trump administration’s reversal of Biden-era export controls represents a significant policy pivot in how the U.S. approaches technology exports to the UAE.

The UAE has been the leading export market for U.S. goods in the Middle East and North Africa region, with bilateral trade reaching $34.4 billion in 2024 and creating a $19.5 billion trade surplus for the U.S.4.

The deal specifically enables the export of 500,000 advanced AI chips annually from U.S. companies to the UAE starting in 2025, benefiting companies like Nvidia and AMD while strengthening the UAE’s position as a regional tech hub5.

This agreement addresses previous concerns about the UAE’s ties to China through provisions ensuring responsible use of exported technologies and implementation of compliance measures56.

The UAE’s transition toward a more diversified economy, with non-oil sectors now contributing over 75% to its GDP, makes this technology partnership particularly strategic for both nations’ economic interests4.

3️⃣ Strategic moves to consolidate US technological leadership in the Middle East

The UAE agreement appears designed to strengthen American technological influence in a geopolitically significant region.

By partnering with G42 and bringing in major U.S. companies like Oracle, Nvidia, and OpenAI, the U.S. is establishing preferential technology relationships that promote reliance on American tech infrastructure6.

The UAE has established robust foundations for this partnership through significant investments in AI, including appointing the world’s first AI minister and creating dedicated research initiatives to position itself as a leading regional tech hub7.

These collaborative efforts could accelerate AI development while ensuring that critical infrastructure and intellectual property remain aligned with U.S. strategic interests and security requirements.

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