Microsoft’s $15.2B UAE investment turns Gulf State into test case for US AI diplomacy

Microsoft will invest $15.2 billion in the United Arab Emirates over the next four years, the company announced Monday at the first annual Abu Dhabi Global AI Summit. The investment will include the first-ever shipments of the most advanced Nvidia GPUs to the UAE.

As part of the deal, the U.S. has granted Microsoft a license to export Nvidia chips to the UAE, a move that positions the country as both a proving ground for U.S. export-control diplomacy and a regional anchor of American AI influence.

The deal allows Microsoft to expand its foothold into the Middle East, a key region in the global fight for AI dominance. In May, President Donald Trump struck a deal with UAE President Sheikh Mohamed bin Zayed al-Nahyan to build an AI data center campus in Abu Dhabi. The project was delayed due to U.S. export controls, which restricted the sale of powerful Nvidia chips needed to run advanced AI systems.

Microsoft became the first company to receive a license from the U.S. Commerce Department to ship the chips to the UAE in September. The move comes as critics say the deal undermines the logic of the U.S.’s export restrictions to China by introducing possible back-channels through a Chinese ally. 

In a statement, Microsoft said it performed substantial work to meet the strong cybersecurity and national security conditions required by the licenses, which has enabled the firm to accumulate the equivalent of 21,500 Nvidia A100 GPUs in the UAE, based on a combination of A100, H100, and H200 chips.  

Microsoft said it is using the chips to provide access to AI models from OpenAI, Anthropic, open-source providers, and itself. 

The $15.2 billion figure includes money Microsoft began spending in the UAE starting in 2023 as part of a new AI initiative in the country. Between 2023 and the end of 2025, Microsoft will have spent just over $7.3 billion in the UAE, including a $1.5 billion equity investment in G42, the UAE’s sovereign AI company, and more than $4.6 billion in capital towards data centers. 

As part of the new deal, Microsoft pledges to spend $7.9 billion more in the UAE from the start of 2026 to the end of 2029, including $5.5 billion in capital expenses for ongoing and planned expansion of AI and cloud infrastructure. Microsoft hinted at new steps it will share publicly in Abu Dhabi this week.

Microsoft’s work in the UAE goes beyond building data centers. The company says it is pairing massive AI infrastructure with deep investment in local talent, training, and governance. The firm is pledging to train a million residents by 2027 and use Abu Dhabi as a regional hub for AI research and model development.  

The investment comes the same day that Microsoft signed a $9.7 billion deal with Australia’s IREN for AI cloud capacity.