UAE Emerges as Second Largest Foreign Investor Globally with $70.6 Billion
$4.89 Billion in Foreign Investments Attracted by the Country from 2020 to 2025
11 New Data Centers Under Construction in the UAE Worth $3 Billion, Set to Complete by 2026
6 Data Centers in Planning Stage in the Country Valued at $41 Billion
500,000 Latest NVIDIA Chips Imported by the UAE Following the Repeal of the AI Deployment Rule
The United Arab Emirates has set ambitious targets to become a global leader in artificial intelligence (AI). It is projected that AI will contribute over $96 billion (AED 350 billion) to the nation’s GDP by 2031, with expected annual growth rates between 20% and 30%. According to PwC, AI is anticipated to account for 13.6% of the UAE’s GDP, marking the highest percentage among Gulf Cooperation Council (GCC) countries, compared to 12.4% in Saudi Arabia and 8.2% in other GCC nations.
A recent report from Emirates NBD, obtained by local media, indicates that the UAE ranks fifth globally on the Stanford AI Vitality Index, emerging as a frontrunner in the AI domain through various strategic initiatives.
In 2017, the UAE launched its National AI Strategy 2031, aiming to become a world leader in this field. The strategy focuses on enhancing productivity and reducing costs across sectors such as transportation, space, renewable energy, water, technology, education, environmental management, and healthcare, particularly in combating chronic and life-threatening diseases.
2031 Strategy
As part of its AI Strategy 2031, the UAE established the world’s first Ministry of AI, appointing Omar Sultan Al Olama as its minister. It also founded Mohamed bin Zayed University of Artificial Intelligence, the first graduate university dedicated to AI.
The university developed the PAN model, a realistic simulation environment for training AI agents, which plays a crucial role in supporting autonomous driving, drone navigation, and smart robotics. This aligns with Dubai’s Self-Driving Transport Strategy that aims for 25% of total transport to be autonomous by 2030.
Moreover, Mohamed bin Zayed University of Artificial Intelligence launched the Jais program, a large-scale Arabic language model (LLM), which is expanding globally with research centers established in Paris and Silicon Valley.
These centers, part of the Institute for Fundamental Models (IFM), focus on multilingual AI, generative AI, and AI safety.
Infrastructure
To facilitate AI growth, the UAE has invested heavily in information and communication technology (ICT) and internet infrastructure, backed by public and private sector investments, as well as foreign direct investments.
During a visit by then-US President Donald Trump to Abu Dhabi in May 2025, G42, an Abu Dhabi-based holding company specializing in AI, announced a partnership with OpenAI, NVIDIA, Cisco, SoftBank, and Oracle to develop “Stargate UAE,” an AI data center complex with a capacity of 5 gigawatts. The first phase, with a capacity of 200 megawatts, is expected to be completed by 2026.
Building these AI data centers requires substantial capital; for instance, NVIDIA’s H100 graphics processing units cost about $30,000 each, and a large data center might need at least 10,000 GPUs, totaling $300 million.
For context, OpenAI used around 20,000 GPUs to train GPT-4, while firms like Meta and Microsoft operate facilities housing over 100,000 GPUs, consuming enormous amounts of energy. Data centers with a capacity of 100 megawatts are estimated to use the equivalent of energy from 350,000 to 400,000 electric vehicles annually, according to the International Energy Agency.
Foreign Investment
New foreign direct investment flows in ICT and internet infrastructure have shown notable growth, with the UAE attracting $4.89 billion in foreign direct investments in this sector between 2020 and 2025, representing a 60% increase compared to previous investments.
In early 2025 alone, the UAE secured $220.6 million in investments for data centers, and in March 2025, Microsoft announced plans to build sovereign cloud and AI infrastructure in partnership with G42, supporting Abu Dhabi’s 2025-2027 strategy to become the first local government in the world to adopt AI comprehensively.
This infrastructure will manage over 11 million daily interactions between government entities, citizens, and businesses. Additionally, in 2024, Microsoft acquired a minority stake worth $1.5 billion in G42.
The largest two foreign direct investment projects in new sectors came from Acronis and Swiss GRC, each investing $246 million.
Switzerland ranks second only to the United States in total capital investment in UAE’s digital infrastructure and ICT, with $2.86 billion across 20 projects, followed by the UK with $466 million across three projects, India with $356 million in one project, and Germany with $245.8 million in one project.
Data Centers
The UAE has the highest number of operational data centers in the region, totaling 35, compared to Oman’s 12 and Saudi Arabia’s 11. Employee spending on public cloud services averages $228, the highest in the region according to Boston Consulting Group data.
Dubai hosts 18 of these data centers, while Abu Dhabi has 16, leading in value with data center assets amounting to $1.23 billion compared to $815 million in Dubai. Fujairah is home to one data center operated by Etisalat. Currently, there are 81 data centers either under construction or in the planning phase.
11 new data centers valued at $3 billion are being developed, expected to be completed by 2026. Furthermore, there are 6 data centers in the pre-execution planning stage worth $41 billion, with $40 billion allocated for the UAE-American AI center G42.
The “American AI Deployment Rule” previously hindered the growth of data centers by restricting the import of advanced chips like NVIDIA’s H100 and H200. However, in May 2025, this rule was repealed by the Trump administration, enabling the UAE to import up to 500,000 of the latest NVIDIA chips annually. This move has bolstered the UAE’s efforts to expand its data centers and is expected to accelerate the development of AI infrastructure in the country in the future.
Local Expansion
Khazna, the largest data center operator in the UAE, operates eight centers and plans to construct seven additional ones; five are currently under construction, and two are in the planning stages.
Khazna emerged from the merger of G42 and e& data centers in 2022. G42 now owns 100% of the company after acquiring e&’s 40% stake for $2.2 billion in February 2025. Furthermore, MGX, a $100 billion AI investment fund, and American company Silver Lake have become strategic investors in Khazna as of April 2025.
UAE’s Competitive Edge
On the international front, the UAE ranks as the second-largest foreign direct investor in ICT and internet infrastructure projects globally, with $70.6 billion, following the United States at $283.9 billion.
The UAE also leads in average capital expenditure per project, which stands at $2.35 billion across 30 projects, compared to the average capital expenditure in the US of $378.6 million across 750 projects.
The G42 Group and Mubadala have established the MGX fund, a $100 billion global investment vehicle aimed at ICT, internet infrastructure, and semiconductors, with MGX having invested approximately $43.4 billion in partnership with Bpifrance, Mistral AI, and NVIDIA to build the largest AI complex in Europe in France (with a capacity of 1.4 gigawatts).
MGX is also involved in the Stargate USA project, a massive $500 billion initiative to build 20 AI data centers across the United States, in collaboration with Oracle, OpenAI, and SoftBank.
Additionally, MGX has been active in private equity deals, investing $6.6 billion in OpenAI at a valuation of $157 billion in October 2024, which has nearly doubled to $300 billion now, and has invested around $6 billion in Elon Musk’s xAI valued at $50 billion.
Damac Holding ranks fourth globally in foreign direct investment in ICT and internet infrastructure, having invested over $20 billion in American data centers.
Its initial phase includes facilities with a capacity of 500 megawatts in states such as Texas, Arizona, and Ohio, among others. Damac has also invested $852 million across three cities in Saudi Arabia (Riyadh, Dammam, and King Abdullah Economic City) and is active in countries including Greece, Spain, Turkey, Malaysia, Indonesia, Jordan, and Ireland.