Microsoft announced on Monday that it has been granted approval by the United States to provide advanced Nvidia chips to the United Arab Emirates (U.A.E.). At the same time, Microsoft plans to significantly increase its investments in the UAE, aiming to invest over $15 billion in the Emirates by the end of 2029.
The UAE is investing billions of dollars to establish itself as a global hub for artificial intelligence (AI) by leveraging its close relationship with Washington to acquire U.S. technologies, including some of the most advanced chips.
In a blog post, Microsoft revealed that the Trump administration had approved its plan to provide chips to the UAE for building data centers necessary for training AI models. The approval is part of a bilateral agreement announced earlier this year in May between the U.S. and the UAE, involving companies such as OpenAI, the maker of ChatGPT, and Oracle.
Microsoft also announced that it will invest an additional $8 billion over the next four years in the UAE for data centers, cloud computing, and other AI projects to counter challenges from competitors.
According to Reuters, Microsoft’s Vice Chairman and President, Brad Smith, stated during an interview at the ADIPEC energy conference in Abu Dhabi, “The largest part of this investment, as we look at it historically and as we look forward, is about expanding AI centers across the UAE.”
Smith added, “From our perspective, this investment is critical in meeting the local demand for AI usage.”
Last year, Microsoft invested $1.5 billion to acquire a minority stake in Abu Dhabi-based AI company, G42, with Smith taking a board seat.
However, G42’s past ties with the Chinese government raised concerns from the U.S. government, partly due to fears that Beijing could access advanced semiconductors through third parties like the UAE.
Smith stated that G42 has made “significant progress” in implementing systems that comply with U.S. legal requirements. This move was in response to Washington’s demand for G42 to sever ties with Chinese companies like Huawei and implement strict technical safeguards to comply with U.S. standards for AI development and export control.
When asked if the Abu Dhabi company would directly receive the most advanced U.S. chips, Smith indicated that he believed it would be “part of G42’s future.”
Smith detailed two rounds of significant export licenses in another blog post on Microsoft’s website:
– A license approved by the Biden administration last year allows Microsoft to accumulate the equivalent of 21,500 Nvidia A100 GPUs (based on a combination of A100, H100, and H200 chips) in the UAE.
– In September this year, following revisions to technical safeguards at the White House, the Trump administration approved an additional export of 60,400 A100 GPUs, including Nvidia’s more advanced GB300 GPU.
The Trump administration views chip exports as a way to make the world rely on U.S. technology, hence prioritizing related matters and abolishing a rule from the Biden era that had increased the difficulty of chip exports.
Smith told Reuters that the recently approved chips have not been shipped yet but are expected to be delivered within “months” and will be used in Microsoft’s self-owned data centers in the UAE.
He mentioned that from 2023 to the end of this year, Microsoft’s total investment in the UAE will reach $7.3 billion.
Additionally, from next year until the end of 2029, a further $7.9 billion will be allocated for the ongoing and planned expansion of AI and cloud infrastructure.
The disclosed $15.2 billion investment does not include the first-phase investment in the “Stargate UAE” project, announced during former U.S. President Trump’s visit to the Gulf in May, which is the world’s largest planned data center hub.