The United Arab Emirates and the United States have formalized a groundbreaking agreement to establish the largest artificial intelligence campus outside the US, located in Abu Dhabi. Announced during former President Donald Trump's visit to the Middle East, this deal is a pivotal move in expanding the UAE’s AI ambitions while marking a significant shift in US technology export policies.

The new AI campus, sprawling across 10 square miles with a massive 5 gigawatt power capacity, will become a regional hub for AI data centers. This facility will be operated by American companies, ensuring US management and cloud services dominate the region. The deal also opens the door for the UAE to import cutting-edge AI chips, reportedly allowing up to 500,000 of Nvidia’s top-tier AI processors annually starting in 2025.

Balancing Act: UAE Navigates US and China Relations

The deal is a major strategic win for the UAE, a country striving to balance its longstanding alliance with the US and its robust economic ties with China, the Gulf state’s largest trading partner. Under the Biden administration, the UAE’s access to advanced US AI chips had been heavily restricted due to concerns about technology falling into Chinese hands.

This new agreement signals a recalibration of US export controls under the Trump administration, which now views the UAE as a trusted partner rather than a risky conduit. It reflects the confidence that with proper safeguards—such as US companies managing the data centers—advanced technologies can be securely shared without compromising national security.

Mohammed Soliman, a Middle East Institute expert, explained, “It doesn’t mean abandoning China but recalibrating tech strategy to align with US standards where it matters most: compute, cloud, and chip supply chains.” This nuanced stance allows the UAE to deepen its technological cooperation with the US while maintaining its trade relations with China.

Industry Titans Back the Vision

The AI agreement has the enthusiastic support of key figures in the technology world. Nvidia’s CEO Jensen Huang was seen interacting with Trump and UAE President Sheikh Mohamed bin Zayed Al Nahyan during the announcement ceremony, signaling the importance of this partnership for the global AI industry.

Leading AI innovators, including OpenAI’s Sam Altman, see the deal as an opportunity to bring their technologies to a larger international audience while driving business growth. The deal also involves US firms like Qualcomm, which will develop an AI engineering center, and Amazon Web Services, which will collaborate on cybersecurity and cloud adoption in the region.

Security Assurances and Strategic Safeguards

The White House underscored the agreement’s historic nature, highlighting the UAE’s commitment to align its national security protocols with US regulations to prevent the diversion of American-origin technology. This alignment is critical given longstanding US efforts to curb China’s access to advanced semiconductors through strict export controls.

Under Trump’s directive, the US is easing some of the previous administration’s restrictions, with AI czar David Sacks emphasizing that export controls were “never intended to capture friends, allies, strategic partners.” This change enables the US and UAE to collaborate more openly on AI technologies without compromising security.

Challenges Remain: The China Factor

Despite the progress, concerns linger about the potential for Chinese influence in the region. While the UAE has moved to phase out Chinese hardware from its AI data centers and sold off certain Chinese investments under US pressure, major Chinese tech giants like Huawei and Alibaba Cloud still operate in the Gulf.

Additionally, reports have surfaced about organized smuggling of AI chips from countries including the UAE to China, highlighting the complexities of controlling advanced technology flows in a globalized world.

A New Chapter in Global AI Competition

This deal between the US and UAE comes at a time when the AI race is intensifying globally. The US has long been a leader in AI innovation, but China has rapidly emerged as a powerful competitor. By securing this partnership, the US aims to strengthen its position in the Gulf while managing geopolitical risks associated with China’s growing influence.

The Abu Dhabi AI campus is more than just a technological infrastructure project; it represents a strategic alignment between two nations with shared interests in securing and advancing next-generation AI capabilities, setting the stage for a new era of global tech collaboration and competition.