Microsoft Commits $15.2 Billion to Boost AI and Cloud Infrastructure in UAE

Microsoft has announced a $15.2 billion investment in the United Arab Emirates (UAE) to be executed between 2023 and 2029, aiming to enhance the nation's artificial intelligence (AI) and cloud infrastructure. This initiative aligns with the UAE's strategic goal to establish itself as a global hub for AI innovation.

The investment is structured in two phases. By the end of 2025, Microsoft will have invested over $7.3 billion, including a $1.5 billion equity stake in G42, an Abu Dhabi-based AI firm; more than $4.6 billion in capital expenditures for advanced AI and cloud data centers; and over $1.2 billion in local operating expenses. From 2026 to 2029, an additional $7.9 billion is planned, with over $5.5 billion allocated for further infrastructure expansion and nearly $2.4 billion for operational costs.

A significant component of this initiative involves the expansion of data center capacity by 200 megawatts, executed through Khazna Data Centers, a subsidiary of G42. This expansion is expected to commence operations before the end of 2026. Additionally, Microsoft has secured U.S. export licenses to supply advanced Nvidia GPUs to the UAE, facilitating the development of AI models from OpenAI, Anthropic, and Microsoft itself.

G42 is a leading AI technology holding company based in Abu Dhabi, focusing on AI and cloud computing solutions. In April 2024, Microsoft invested $1.5 billion in G42, strengthening their collaboration on AI technologies and skilling initiatives in the UAE and globally. As part of this partnership, Brad Smith, Microsoft's Vice Chair and President, joined G42's Board of Directors.

This investment underscores the UAE's commitment to diversifying its economy by investing heavily in AI and digital infrastructure, moving beyond its traditional reliance on oil revenues. The partnership between Microsoft and G42 positions the UAE as a significant player in the global AI landscape, potentially attracting further investments and talent to the region. The approval of advanced AI hardware exports to the UAE reflects a deepening technological partnership between the two nations, with implications for regional tech diplomacy and security considerations.

H.H. Sheikh Tahnoon bin Zayed Al Nahyan, Chairman of G42, stated, "Microsoft’s investment in G42 marks a pivotal moment in our company’s journey of growth and innovation, signifying a strategic alignment of vision and execution between the two organizations." Brad Smith, Microsoft Vice Chair and President, added, "Our two companies will work together not only in the UAE, but to bring AI and digital infrastructure and services to underserved nations."

This comprehensive investment by Microsoft not only signifies a major financial commitment but also highlights the strategic importance of AI and cloud technologies in shaping the future economic and geopolitical landscape of the UAE.