“We’re Seeing Demand Explode”: UAE, US Sign AI And Energy Pact As Microsoft To Invest $7.9B On Infrastructure

The UAE and United States have agreed to work together to ‘accelerate collaboration’ on energy and artificial intelligence. According to The National;

Under the agreement, the UAE and the US will work together on increase advanced industrial capabilities and adopt smart manufacturing technologies. It covers the use of AI in robotics and automation, alongside efforts to promote the sharing of knowledge and capacity building.

UAE President Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, managing director and group chief executive of Adnoc, and executive chairman of XRG, and Doug Burgum, US Secretary of the Interior and Chairman of the National Energy Dominance Council were all present at the signing. 

Meanwhile, Microsoft plans to invest more than $7.9 billion in the United Arab Emirates over the next four years as part of the Gulf state’s push to become a global tech hub, according to Bloomberg.

Announcing the commitment in Abu Dhabi, Microsoft President Brad Smith said, “This is not money we’re raising here. It’s money we’re investing and spending here… We are seeing demand here explode.”

The investment includes nearly tripling the number of advanced Nvidia chips the company will run in the UAE — hardware that had previously faced US export restrictions. Smith said Microsoft received US licenses in September after meeting “very strict conditions” to keep the chips “under our control.”

Bloomberg writes that Microsoft expects to spend $5.5 billion on cloud and AI infrastructure from 2026–2029 and around $2.4 billion on hiring and operations. The company already has about 1,000 engineers and an AI lab in the country.

The UAE is central to Microsoft’s global AI expansion as it races other tech giants to add data-center capacity. Microsoft reported $34.9 billion in global capital spending in the latest quarter and recently announced a $9.7 billion Texas data-center deal.

The software giant has invested $5.8 billion in the UAE since 2023, including $1.5 billion in Abu Dhabi AI company G42, where Smith now serves on the board. OpenAI — backed by Microsoft — has also picked the UAE for its first Stargate data-center project outside the US.

Washington continues to scrutinize chip access in the Gulf amid concerns the technology could leak to China. Microsoft previously deployed 21,500 Nvidia A100-class chips in the UAE and plans to send 60,400 more — including Nvidia’s new GB300 — arriving “in months, not years.”

Overall, Microsoft says its UAE investments will total $15.2 billion from 2023 to 2029.