Microsoft’s $15.2 billion investment in the UAE makes the Gulf state a test case for US AI diplomacy

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

As part of the deal, the United States granted Microsoft a license to export Nvidia chips to the United Arab Emirates, a move that positions the country as both a testing ground for U.S. export control diplomacy and a regional anchor for U.S. AI influence.

The deal allows Microsoft to expand its presence in the Middle East, a key region in the global fight for AI dominance. In May, President Donald Trump reached 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 limited the sale of powerful Nvidia chips needed to run advanced AI systems.

Microsoft became the first company to receive a license from the US Department of Commerce to ship the chips to the United Arab Emirates in September. The move comes as critics say the deal undermines the logic of U.S. restrictions on exports to China by introducing possible backdoor channels through a Chinese ally.

In a statement, Microsoft said it had done substantial work to meet the stringent cybersecurity and national security requirements required by the licenses, allowing the company 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 was using the chips to provide access to AI models from OpenAI, Anthropic, open source vendors and itself.

The $15.2 billion figure includes money Microsoft has started spending in the UAE from 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 data center capital.

Under the new deal, Microsoft commits to spending an additional $7.9 billion in the UAE between early 2026 and the end of 2029, including $5.5 billion in capital spending for ongoing and planned expansion of AI and cloud infrastructure. Microsoft hinted at the new measures it will share publicly in Abu Dhabi this week.

Microsoft’s work in the UAE goes beyond building data centers. The company says it combines massive AI infrastructure with massive investments in local talent, training and governance. The company is committed to training one million residents by 2027 and using Abu Dhabi as a regional hub for AI research and model development.

The investment comes the same day Microsoft signed a $9.7 billion deal with Australian company IREN for AI cloud capacity.