UAE's bumper US bet is AI access down payment
LONDON, March 26 (Reuters Breakingviews) - United Arab Emirates' Sheikh Tahnoon bin Zayed Al Nahyan may be seeking to bend President Donald Trump's ear on artificial intelligence with his oil-backed chequebook. The Gulf state is committing to invest $1.4 trillion over the next decade in the United States despite the country's economic and political uncertainties. The key test for the deal is whether it gives Abu Dhabi better access to U.S. AI technology and chips.
The pledge announced, opens new tab on Friday by the White House came after Sheikh Tahnoon, the UAE's national security adviser, met Trump, tech moguls like Nvidia's (NVDA.O), opens new tab Jensen Huang and Microsoft's (MSFT.O), opens new tab Satya Nadella, as well as BlackRock's (BLK.N), opens new tab Larry Fink. The plan is to 'substantially' increase 'existing investments' in AI infrastructure, semiconductors, energy and manufacturing.
The two countries have history. Abu Dhabi has already spent more than $1 trillion in the United States over the years, according to the UAE government, opens new tab. Part of it is UAE's energy giant ADNOC investment in liquefied natural gas projects in Texas. In 2024, the U.S. exported $27 billion of goods to the UAE, making the latter America's third-largest trade surplus partner. Friday's pledge even includes a plan for Emirates Global Aluminium to invest in a new smelter plant that will nearly double U.S. production.
It seems to be an odd time for Sheikh Tahnoon to double down. U.S. stock valuations are rich, with the S&P 500 Index (.SPX), opens new tab trading at 21 times the next 12 months earnings. And the American economy will likely face a slowdown when Trump's tariff war bites. Moreover, being a keen U.S. investor hasn't helped Abu Dhabi much when it comes to accessing AI chips. In 2023 the U.S. restricted exports of Nvidia-designed chips to the UAE, partly out of concern they might be shared with China. Under Trump predecessor Joe Biden's AI diffusion rule, the United States put Abu Dhabi in the second tier, opens new tab of countries that are subject to export limits for advanced chips, with strict licensing and security checks needed for exports above a set threshold.
Those export curbs come into force in May. The $1.4 trillion pledge is probably a last-ditch effort to persuade the Trump government to rethink the restrictions, or perhaps upgrade the UAE's status. Keeping Trump happy would also make it easier for Abu Dhabi to invest more in cutting edge AI startups such as Elon Musk's xAI. Given the UAE's goal to be a global AI leader, that would be a good trade off.
Follow @karenkkwok, opens new tab on X
CONTEXT NEWS
The United Arab Emirates has committed to a 10-year, $1.4 trillion investment framework in the United States after top UAE officials met President Donald Trump, the White House said on March 21.
The framework will "substantially increase the UAE's existing investments in the U.S. economy" in AI infrastructure, semiconductors, energy, and manufacturing, the White House said in a statement.
Among the tie-ups highlighted was a partnership between UAE sovereign wealth fund ADQ and U.S. private equity firm Energy Capital Partners, for a $25 billion U.S.-focused initiative to invest in energy infrastructure and data centres. Another investment announced was by Emirates Global Aluminium in what would be the first new aluminium smelter in the United States in 35 years, the White House said, adding the plant "would nearly double U.S. domestic aluminium production".
Meanwhile, Trump in January asked Saudi Arabia to spend upwards of $1 trillion in the U.S. economy, over four years, including purchases of military equipment, and said in March he likely would make his first trip abroad to the Gulf country to seal an investment agreement.
The deal, which could happen between this month or the next, would come at a time when Saudi Arabia, the Arab world's biggest economy, has been taking a more prominent role in U.S. foreign policy. The Gulf country is set to host diplomatic talks around Ukraine involving the United States and Russia.
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