Since US President Donald Trump returned to office this year, his administration has announced a series of partnerships and investments involving the UAE – and more could come out of his upcoming trip to the Gulf.
The White House announced in March that the UAE had pledged a $1.4 trillion “investment framework” for projects related to artificial intelligence infrastructure, semiconductors, energy and manufacturing.
That announcement followed moves in the private sector, with MGX pledging $7 billion as part of the Stargate venture and Damac planning to invest at least $20 billion to build US data centres.
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, has also said XRG, Adnoc's global investment firm, will make “serious, large, significant” investments in the US.
This is because, he said at the time in Houston, the UAE sees investing in the US an “absolute imperative”.
“There's ambition for Trump to have the Emiratis be among those investing in AI infrastructure in the US,” said Rachel Ziemba, founder of Ziemba Insights.
“And there's an interest there from the Emiratis, and there's an interest in the Emiratis of getting to be in the US ecosystem for AI.”
The UAE sees AI as a major driver of its economic diversification efforts, and its partnerships with the US in the sector predate the second Trump administration.
Last year, Microsoft signed a $1.5 billion deal with Abu Dhabi's G42. Later that year, MGX joined BlackRock GIP and Microsoft in a $30 billion AI infrastructure fund, which in March expanded to include Nvidia and xAI.
These planned investments were made on top of the $1 trillion acting investments the UAE had made in the US.
Energy push
Along with the growth of AI, there has been an expansion of data centres housing the semiconductors and graphics processing units needed to power iterations of AI such as chatbots, transcription tools and image generation software
As a result of the electricity demand from the burgeoning AI sector, energy grids all over the world could soon become overburdened.
That is not lost on the UAE, which has a historically strong presence in the energy sector, nor has it gone unnoticed by the US, which is seeking to maintain its lead in AI, with China nipping at its heels through companies like DeepSeek and Huawei.
In March, Abu Dhabi's sovereign wealth fund ADQ announced that it had joined with US private equity firm Energy Capital Partners to invest more than $25 billion in energy projects to power data centres, mostly in the US.
That investments will be carried out through a 50-50 partnership across 25 gigawatts' worth of new power generation and energy infrastructure, according to ADQ.
But the UAE's energy investments are not limited to AI.
Mubadala has agreed to acquire a minority stake in Kimmeridge Texas Gas, which is focused on unconventional gas business in Texas. It is also planning to build a liquefied natural gas facility in Louisiana that will produce 9.3 million metric tonnes of the product each year.
Was AI diffusion the lone hiccup?
Yet for all the announcements of co-operation between the UAE and the US, there are lingering concerns in the Gulf country about AI chip exports.
The US has expressed concern that China, which it views in an increasingly adversarial light, might be using US-made AI technology to bolster its own technological ambitions.
Those concerns led to the development of what's become known as AI diffusion rules, announced in January in the final days of former president Joe Biden's administration. The rules would place limits on the various chips available to certain countries and have become a source of ire for countries like the UAE, Israel, Saudi Arabia and others.
Critics of the rules said that they penalise countries with peaceful AI aspirations. Until recently, there was no indication that Mr Trump would change the policies before May 15, when they are scheduled to go into effect.
But that changed in recent weeks, Mr Trump told reporters he would soon announce changes to the proposals.
Also helping change the policies were pushes from US tech heavyweights like Nvidia and Microsoft, which have both spoken highly about and invested in the UAE.
Both Nvidia and Microsoft have said that the AI diffusion rules were unfair.
In addition to those technology businesses vouching for the UAE, the energy and data centre deals announced by companies in the country are also likely to have helped in alleviating chip export worries.
“Partnering with these key US firms and agreeing to use US infrastructure is a way to mitigate some of those risks,” Ms Ziemba said.
Better, worse or about the same?
Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington, pointed out that the recent announcements did not happen in isolation.
“There's a strong historical foundation of investments between the US and the UAE,” he said, pointing out that the two countries share a history of strong trade ties, with bilateral trade reaching $34.4 billion last year, according to the Office of the US Trade Representative.
He also cautioned that because of the nature of investments work, it would be best to wait and see how everything pans out.
“A framework is precisely that – it's a kind of intention to invest,” he said, referring to the White House announcing the UAE's $1.4 trillion commitment back in March.
“Investments can take years … to reach that final investment decision stage.”
Yet for Mr Trump, who won the White House twice on a campaign of promises with limited details of how they would be accomplished, the recent flurry of UAE announcements is ideal.
“This is a type of engagement that resonates with President Trump and his administration more so than the Biden administration,” Mr Mogielnicki said.
ICC Intercontinental Cup
UAE squad Rohan Mustafa (captain), Chirag Suri, Shaiman Anwar, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Saqlain Haider, Ahmed Raza, Mohammed Naveed, Imran Haider, Qadeer Ahmed, Mohammed Boota, Amir Hayat, Ashfaq Ahmed
Fixtures Nov 29-Dec 2
UAE v Afghanistan, Zayed Cricket Stadium, Abu Dhabi
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Kobe Bryant 33,643
Michael Jordan 32,292
LeBron James 31,425
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- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
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What are the regulations?
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
HIJRA
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Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
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Producer: Zee Studios, Kamal Jain
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October 4: Round One of Rotax Max Challenge, Al Ain (karting)
October 1: 1 Round One of the inaugural UAE Desert Championship (rally)
November 1-3: Abu Dhabi Grand Prix (Formula One)
November 28-30: Dubai International Rally
January 9-11: 24Hrs of Dubai (Touring Cars / Endurance)
March 21: Round 11 of Rotax Max Challenge, Muscat, Oman (karting)
April 4-10: Abu Dhabi Desert Challenge (Endurance)
Results:
First Test: New Zealand 30 British & Irish Lions 15
Second Test: New Zealand 21 British & Irish Lions 24
Third Test: New Zealand 15 British & Irish Lions 15
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
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- Grade 1 = between grades F and G
