Damac’s $20bn investment shows evolution of Trump’s close ties with Gulf

Middle East investors are expected to boost investment in sectors including technology, space and EVs amid stronger ties with next US president

US president-elect Donald Trump listens as Hussain Sajwani, chief executive of Damac Properties, speaks at Mar-a-Lago, in Palm Beach, Florida. AP

Emirati billionaire Hussain Sajwani's planned $20 billion investment in US data centres deepens ties he established with president-elect Donald Trump nearly a decade ago, and marks a return to one of the hallmarks of the Republican's first term in office.

The promised investment is the latest drawn from the relationships Mr Trump has developed in the Arabian Gulf region, both through his business interests and as US president.

Speaking alongside his close friend and business partner Mr Sajwani, during a press conference at Mar-a-Lago on Monday, Mr Trump said the deal would “keep the US on the cutting edge of technology”.

Damac said it would deliver data centres, aiming for capacity of 2 gigawatts over the next four years. The first phase will focus on eight US states in the Sunbelt and Midwest regions, which would acquire land banks, existing data centres and other platforms. Damac said this would represent capacity of about 500MW, which the company said would meet growing current demand as Edgnex continues to scale.

Damac and Mr Trump said the $20 billion investment would probably only be the floor, and the president-elect even suggested the group could double that commitment. Mr Sajwani said he could invest more under the right market conditions.

The investment represents a shift in strategy for Damac Group. The Dubai-based conglomerate has its roots as a luxury property developer and is also planning a condominium project in Miami designed by Zaha Hadid Architects.

Mohammed Soliman, a global strategy adviser at McLarty Associates, said the UAE billionaire's pivot to technology mirrors a wider trend from investors.

“Mr Sajwani, like many others, views the US market as the most lucrative destination for tech investments, particularly in data centres that support artificial intelligence, cloud, and other emerging technologies,” he said.

Ian Byrne, associate vice president at Beacon Global Strategies in Washington, sees the investment as less of a pivot and more of a complementary move.

“At the end of the day, data centres are a real estate investment”, My Byrne said, as companies purchase large buildings which house IT infrastructure needed to support them. Private US equity firms including BlackRock and KKR are also pouring in billions of dollars to build these facilities.

The investment highlights the US's growing influence in artificial intelligence as it seeks to establish dominance in advanced technologies.

“The US is just the centre of the AI universe. If you're an investor with capital and you want good ROI, or you're looking to invest in the AI sector, you're going to go to the US,” Mr Byrne said.

Mr Soliman agreed: “The US economic size and growth make its market highly attractive, and its leadership in sectors like AI … presents significant potential for lucrative returns.”

Earlier this week, the Biden administration announced Arizona would host the third research and development flagship complex under the US Chips Act. The centre will develop semi-conductors used to power artificial intelligence and quantum computing.

While the Damac investment signifies the latest milestone between the US and UAE in advanced technology, it is also a testament to the security, defence and economic relationship the nations have, Mr Byrne said.

Dubai developer Damac Properties announces $20 billion investment in the US

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“With the explicit purpose of investment in data centres and AI infrastructure, I think that just builds off the already existing, strong relationship that the US and the UAE have been building when it comes to AI and emerging technologies.”

Billionaire businessman Elon Musk's close ties with Donald Trump is expected to benefit the tech sector in the US. AFP

Elon Musk partnership

Mr Sajwani is investing in the technology field because there is a widespread expectation that the sector will benefit the most from Trump administration policies, according to Ryan Bohl, senior Middle East and North Africa analyst at US-based Rane Network.

"Elon Musk and other tech leaders ... are showing that they are going to be very co-operative with the Trump administration ... to propel the boom that's currently fuelled by largely AI,” Mr Bohl said.

Middle East investors are also expected to invest in EVs as well as in the automotive industry, space, defence and cryptos amid new opportunities under Mr Trump's presidency.

Middle East investors including Abu Dhabi-listed companies International Holding Company and Alpha Dhabi have snapped up stakes in aerospace company SpaceX, founded by Mr Musk. The two companies announced a combined $50 million investment in 2022.

The UAE's Mubadala Investment Company is also heavily investing in the US, its latest deal being to acquire a minority stake in healthcare technology company Zelis.

Saudi Arabia's sovereign wealth fund, the Public Investment Fund, also has interests in US companies including Meta, the parent company of Facebook and Alphabet.

“When they're looking for productive places to spend their money, the United States will probably be one of the best economies to do at least in the near term,” Mr Bohl said.

"The US is probably one of the safest destinations, not just from an investment standpoint, but also geopolitically, thinking about the security threats that exist for other countries, like even in Europe, where cables are being cut and they're sabotaged, that's very unlikely to happen in the United States."

Trump-Gulf ties

The new announcement also deepens the ties between the Emirati billionaire and the US leader and veteran businessman, and marks a return to one of the hallmarks of the Republican's first terms in office: mixing his business interests with US interests.

Mr Sajwani first teamed up with Mr Trump in 2013 to build a Trump-branded golf course. It opened in 2017 as the centrepiece of Damac Hills, a gated community of luxury homes located in Dubai.

Two of Mr Trump's adult sons – Eric and Donald Jr – also attended the wedding of Mr Sajwani's daughter in 2018. The Emirati businessman was also a regular presence at Mar-a-Lago during Mr Trump's first term, US media reported. Last week, he posted a picture on X of himself with the president-elect and Tesla chief executive Elon Musk during a New Year's Eve celebration at Mar-a-Lago.

But the investment also signalled a continuation of the ties Mr Trump has to the Gulf as both a businessman and politician. He has numerous projects in the region and chose Saudi Arabia as his first official visit as president in 2017.

The Trump Organisation, owned by Mr Trump, is also teaming up with London-listed Dar Global to develop new projects in Oman, Dubai and Saudi Arabia. It aims to further expand in the region with new projects, its executive vice president Eric Trump told The National last month.

“What we're seeing right now is just a continuation of those strong ties,” Mr Byrne said.

Mr Sajwani's investment, as well as that made by SoftBank last month, signal what could be a shift in foreign investments in the US following Mr Trump's election. The president-elect campaigned to usher in a new era of deregulation and create a more business-friendly environment. Mr Trump claimed the investments were only made because of his 2024 electoral victory.

Mr Trump also said he would grant Damac “expedited reviews” of environmental probes, which the president-elect promised to any company planning to invest $1 billion in the US.

“For the last four years, we've been waiting for this moment,” Mr Sajwani said alongside Mr Trump in Palm Beach, Florida.