The United Arab Emirates' AI Ambitions

The United Arab Emirates (UAE) is placing enormous bets on artificial intelligence (AI) to diversify its economy and become the world's next technological hub. As the United States develops its strategy for global AI leadership, the UAE presents a critical test case for engaging with technologically ambitious countries seeking to balance relations with both the United States and China—a challenge that will shape the United States' broader approach to technological partnerships and export control policies. In late 2024, a group of U.S. technology policy and national security scholars, including the four authors of this paper, traveled to the UAE to understand the country's AI strategy, its position amid U.S.-China competition, and Microsoft's $1.5 billion deal with Emirati national AI champion Group 42 Holding Ltd. (G42). The visit combined meetings arranged through the authors' existing networks with those suggested and facilitated by the UAE embassy in Washington, D.C. This paper presents the authors' following eight assessments about the opportunities and risks of U.S.-UAE cooperation in AI:

1. The UAE's commitment to AI represents a genuine national priority with broad leadership support and ambitious economic targets.
2. Emirati officials claim to be "decoupling" from China in AI while acknowledging that they are trying to maintain broader economic ties with both China and the United States.
3. Despite the UAE's stated commitment to U.S. partnership in AI, China is exerting significant pressure to reinforce its technological influence in the region.
4. While Emirati officials accept the national security justification for U.S. export controls, they express frustration with the United States' implementation of these controls and the UAE's country classification.
5. Microsoft's $1.5 billion investment in G42 reflects its strategy to secure leadership in global AI cloud infrastructure and expand its AI applications portfolio worldwide.
6. G42's ambitions extend far beyond its Microsoft partnership. The company desires to build 10 to 100 times more data center capacity (independently or with additional partners) than outlined in its current Microsoft agreement.
7. According to G42 and Microsoft representatives, the security controls at the G42 data center the authors toured match typical U.S. commercial standards. While the authors did not find evidence to dispute these claims, the broader question remains whether such commercial-grade controls—whether in the United States or UAE—will prove sufficient as AI capabilities advance and state-sponsored threats evolve.
8. The United States faces two key questions: how to engage with "swing states" in the U.S.-China technology competition, and specifically how to approach the UAE's ambitious AI aspirations. While the immediate decision centers on AI chip exports, this choice will inform the broader strategy of how to diffuse U.S. technology—from AI chips to cloud services—globally.

Global leadership in AI remains the United States' to lose, but continued U.S. leadership is by no means assured. The United States can support Microsoft-led projects in the UAE while remaining cautious of endorsing the UAE's broader AI ambitions. U.S. policymakers and AI executives should maintain a healthy realism about the UAE's vested interests in hedging its bets between the United States and China. They should ask tough questions—such as what the Emirati government is doing to ensure decoupling from China in AI by tech companies other than G42—and scrutinize the UAE's answers. For now, however, proceed with caution.