Deep in the Abu Dhabi desert, construction is unfolding on a scale difficult to overstate. A massive artificial intelligence campus – occupying an area equal to a quarter of Paris – is set to become the largest data-center complex outside the United States. Tower cranes operate nonstop, raising long, low buildings that will run on five gigawatts of electricity – a figure that underscores how seriously the oil-rich Emirates intend to diversify their economy through technology.
A coverage radius reaching four billion people
Johan Nielerud, Chief Strategy Officer at Khazna Data Centers – a subsidiary of UAE AI giant G42, which leads the project – explains the ambition simply: the campus will provide data storage and computing capability within a 3,200-kilometre radius, covering regions inhabited by up to four billion people. This is not just infrastructure; it is an attempt to position the UAE as a global hub for artificial intelligence. Since the 1960s, oil has driven the UAE’s transformation from a desert outpost into a Middle Eastern diplomatic and economic heavyweight. Now the country hopes AI will fill the gap as global oil demand eventually declines. Nielerud puts it bluntly: the UAE punches above its weight because it is a small nation determined to lead. The goal is to attract global partners and build a country inherently structured around artificial intelligence.
Phase one of the project – G42’s Stargate UAE cluster with one gigawatt of capacity – will be operated by OpenAI with support from major US tech companies:
- Microsoft has committed $15.2 billion to the UAE by 2029
- Oracle, Cisco and Nvidia are helping build the infrastructure
How an oil monarchy is transforming into an AI power
The UAE began betting on AI in 2017, when it appointed the world’s first minister of artificial intelligence and became the second country after Canada to launch a national AI strategy. One year later, G42 was founded with support from Abu Dhabi’s sovereign wealth fund Mubadala. Led by Sheikh Tahnoun bin Zayed Al Nahyan, brother of the UAE President, the company now offers a wide range of AI products and employs more than 23,000 people. Officials say the country has invested over $147 billion in artificial intelligence since 2024, including up to €50 billion in a one-gigawatt data center in France.
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Professor Jean-François Gagné of the University of Montreal draws a parallel: AI, like oil, is a cross-cutting sector that can exert leverage across multiple industries. In 2019, Abu Dhabi opened the Mohamed bin Zayed University of Artificial Intelligence – the world’s first university fully dedicated to AI. Last year, AI became a core subject in public schools starting from kindergarten. The university and the Abu Dhabi Institute of Technological Innovation have launched generative AI models, including Falcon, which has achieved performance comparable to leading global systems and now has an Arabic version.
Technological sovereignty requires domestic development
Seeking to reduce reliance on imported equipment and expertise, the UAE has invested heavily in R&D and local innovation programs. The Technology Innovation Institute has opened a joint research lab with Nvidia to advance generative AI and robotics, says CEO Najwa Aaraj. Eric Xing, President of the Mohamed bin Zayed University of AI, explains the logic: sovereignty, self-sufficiency and the ability to adapt technologies to local needs are essential – and impossible when relying solely on imports.
This strategy of technological sovereignty is already influencing related industries, including construction and real estate. As highlighted in UAE real estate developers news, major developers are closely tracking these trends and embedding AI-ready infrastructure into new projects – from smart building management to automated rental workflows – enabling owners to quickly learn how to create a lease agreement in Dubai through integrated online platforms that use data-verification algorithms and machine-generated documents.
Read also: Dubai court dismisses crypto laundering case against Indian businessman.
In the global chip race, the UAE balances between the US and China
In the competition for AI dominance, the UAE trails behind the US and China – but the small desert nation has specific advantages:
- Unlimited access to energy through oil, gas and year-round sunlight, enabling rapid construction of power-hungry data centers
- Financial resources and centralized decision-making that allow multi-billion-dollar investments without long political processes
- Status as a regional business hub with a population that is nearly 90% expatriate, giving it an edge over Saudi Arabia in attracting global talent
Throughout this process, the UAE has balanced delicately between the US and China to secure vital AI-related imports, including advanced chips that keep data centers running. Last month, after intensive lobbying, the US approved the export of high-end Nvidia chips to both the UAE and Saudi Arabia. Gagné summarizes the geopolitical challenge: the UAE does not want to depend on China – but that does not mean it wants to depend on the US either. Independence through domestic capability remains the strategic goal, even if the path requires temporary alliances. Despite progress and years of massive investment, success in this complex, fast-shifting sector is far from guaranteed. As Gagné notes, we simply do not yet know which strategies will win or who the eventual leaders will be. Some bets will fail; others will succeed
