Key Takeaways
- US has signed an agreement with the UAE for the construction of the largest AI datacenter outside the US.
- UAE can also purchase 500K advanced NVIDIA chips every year starting in 2025.
- Saudi Arabia AI company HUMAIN announced that it would partner with NVIDIA in order to build 500 MW AI factories over the next five year.
Donald Trump’s visit to the Middle East has turned out to be quite fruitful for both parties. The US has signed a new deal with the UAE, wherein ‘the Middle East powerhouse’ will build a 10-square-mile AI facility in Abu Dhabi with a power capacity of 5 gigawatts.
Remember, this kind of power can support 2.5 million Nvidia B200 chips. The facility will be built by Emirati government-backed AI company G42. This is the same company in which Microsoft invested $1.5 billion last year.
However, the US seems to be cautious about the deal and would control a large part of the facility, even after it’s operational. Howard Lutnick, the US Secretary of Commerce, said that American companies will operate the data center and offer cloud services through the Middle East.
This agreement would also allow the UAE to import 500K advanced Nvidia AI chips every year starting as early as 2025. Nvidia CEO Jensen Huang also accompanied Trump on his visit.
Additionally, the agreement requires the UAE to reposition their national security regulations with the US, considering the country’s strong trading ties with China. This is important to prevent any diversion of US technology to other countries, specifically China.
Recently, during Trump’s visit to Saudi Arabia, the country unveiled HUMAIN, an AI firm that is part of the country’s public investment fund. HUMAIN recently announced a A landmark deal with NVIDIA.The plan is to build AI factories in the next five years with a capacity of 500 MW, using millions of NVIDIA graphics cards.
These AI Data Centers will be used to train and deploy AI models at a larger scale. Saudi Arabia is looking to become a global AI powerhouse in order to drive the next wave AI development in the Middle East. Its partnership with NVIDIA could be just the beginning.
AI Shaping Geopolitical Ties
In recent years, the Middle East has tried to increase its AI investments and efforts. In 2020, the UAE hired Eric Xing as the director of the Mohamed bin Zayed University of Artificial Intelligence. Saudi Arabia then hired Jurgen Schmidhuber to lead its King Abdullah University of Science and Technology.
The quality of AI research in these countries is subpar when compared with China and the US. This is due in large part to the limited access to advanced computing resources. The new deal with the US could make this a thing of history.
It seems that the Middle East is at a crossroads. It must maintain its trade ties with China but cannot cut off US relations due to the latter’s AI dominance. By 2023, China will account for around 11% of the UAE total exportsvalued at $41.8 billion. It also accounts for 20 % of the country’s exports are $77.42 billion.
The UAE is not stupid enough to abandon China just to please the US. This deal will be meticulously planned by both countries. The US will make sure that the AI chips don’t end up in China while the UAE will take care not to upset China.
Trump Exploring New Markets.
With this deal, the US has also shown great trust in the Middle East. Earlier, the US administration had blocked such deals, citing the Middle East’s close ties with China. Trump, however, has quickly realized that he must tap into the potential of ‘oil-money’ to stamp America’s authority over artificial intelligent.
The US may also be interested in the Middle East because it has blocked the Chinese markets for manufacturers such as Nvidia and AMD. A new law could be introduced that would require US companies exporting AI chips to track their location so that they don’t end up in Chinese hands.
The strict measures will lead to the loss of all Chinese markets. Note that China contributed 13% to Nvidia’s revenue for the fiscal year ending January 2025. The US-Middle East deal could also be an desperate move on the part of the former to find markets for its massive AI production units.
Trump also doesn’t appear to have many options. The Middle East, after the Chinese market was exiled, is the largest emerging AI consumer and producer globally. At least until the time this article was written, other strong candidates such as India had not shown much interest in AI technology developments.
The South American market might not be enough to compensate for the loss of Chinese revenue. In all likelihood, the US is more in need of this deal than the Middle East.
On the other hand the Middle East seems to also be in the mood for redefining traditional partnerships through strategic investment and diplomatic tools. This creates a win-win scenario for both parties.
Mohammed Soliman is a senior at Middle East Institute and said that this change will improve the country’s technological partnership with the US. This does not mean the UAE is abandoning China, but rather recalibrating their tech strategy in order to prepare for the next decade.
Krishi is a seasoned tech journalist with over four years of experience writing about PC hardware, consumer technology, and artificial intelligence. Clarity and accessibility are at the core of Krishi’s writing style. He believes technology writing should empower readers—not confuse them—and he’s committed to ensuring his content is always easy to understand without sacrificing accuracy or depth. Over the years, Krishi has contributed to some of the most reputable names in the industry, including Techopedia, TechRadar, and Tom’s Guide. A man of many talents, Krishi has also proven his mettle as a crypto writer, tackling complex topics with both ease and zeal. His work spans various formats—from in-depth explainers and news coverage to feature pieces and buying guides. Behind the scenes, Krishi operates from a dual-monitor setup (including a 29-inch LG UltraWide) that’s always buzzing with news feeds, technical documentation, and research notes, as well as the occasional gaming sessions that keep him fresh. Krishi thrives on staying current, always ready to dive into the latest announcements, industry shifts, and their far-reaching impacts. When he’s not deep into research on the latest PC hardware news, Krishi would love to chat with you about day trading and the financial markets—oh! And cricket, as well.
Our editorial policy at Tech Report is to provide helpful, accurate content which offers real value to readers. We only work with writers who are experienced and have specific knowledge of the topics they cover. This includes the latest technology, online privacy issues, cryptocurrencies, software and more. Our editorial policy ensures each topic is researched by our in-house editors. We adhere to strict journalistic standards and all articles are written by real writers.
