Damac data deal is a bold step on the UAE-US tech journey

Hussain Sajwani, founder and chairman of Damac Properties, said the company could increase its investment under the right market conditions. AP

Even for someone as accustomed to the “art of the deal” as US president-elect Donald Trump, $20 billion must be an eye-catching sum. Nevertheless, Tuesday’s announcement that Emirati company Damac Properties will invest this considerable amount in building data centres across at least eight American states is just the latest step in a long-running and consequential tech and trade journey involving the two countries.

The UAE has embraced artificial intelligence and big data not only as an integral part of its transition to a post-oil economy but as essential tools to developing and maintaining its high-tech society of digital services, advanced health care and smart cities. This transition has not been carried out in isolation, and the US – as the world’s largest economy and home to many leading tech pioneers – has been an enduring and preferred partner in the UAE’s digital evolution.

During last September’s high-profile White House visit by President Sheikh Mohamed, he and US President Joe Biden welcomed an April 2024 partnership between Microsoft and the UAE’s Group 42 artificial intelligence company that involved a $1.5 billion investment from the US tech giant. During the same visit, the US and UAE issued a joint statement about their collaboration on AI. In it, Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi and National Security Advisor and US National Security Advisor Jake Sullivan highlighted “the importance of deepening bilateral ties and strengthen co-operation between our governments, companies and workforces”.

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

00:54

These were political acknowledgements of the growing commercial, professional and educational relationships that exist in this field between the UAE and the US. According to a report published by the US-UAE Business Council, major American companies such as Amazon Web Services, Oracle, Dell Technologies and Nvidia also forged partnerships with UAE businesses last year. Global chip maker Nvidia, for example, will collaborate with G42 to drive advanced climate and weather predictions using AI-augmented simulations. The companies will also establish a ClimateTech lab in Abu Dhabi that will serve as a hub for research and development. NYU Abu Dhabi is involved in AI research and education, and many young Emiratis are keen to pursue a career in advanced technology.

So far, so promising. However, the potential for this relationship to grow further is considerable. Speaking alongside Mr Trump in Florida on Tuesday, Hussain Sajwani, founder and chairman of the Dubai-based real estate developer, said Damac could increase its investment under the right market conditions. Elsewhere in the Gulf, the rush to embrace a high-tech business future is well underway – in March it was announced that Amazon’s cloud division was to invest $5.3 billion in Saudi Arabia and develop data centres there next year. In neighbouring Bahrain, a data centre park spread over a 55,000 square metre site is being built in Al Qurain, and market research agency Arizton Intelligence says the kingdom’s data centre market could be worth more than $290 million by 2029.

The US – as the world’s largest economy and home to many leading tech pioneers – has been an enduring and preferred partner in the UAE’s digital evolution

Technology is a rapidly developing sector and although partnerships are important, the pace and scale of changes should not mean they are exclusive. UAE companies work well with American counterparts but remain open to opportunities elsewhere. In March, Abu Dhabi set up a new technology investment company, MGX, to expedite the development of AI and other advanced technology and in November, Adnoc and Abu Dhabi clean energy company Masdar signed a collaboration deal with Microsoft on AI-driven sustainability and decarbonisation initiatives. In February, Khaldoon Al Mubarak, the chief executive of Mubadala Investment Company – a keen investor in AI and other technologies – said investments would be based on attractiveness of opportunities in key markets, not geopolitical considerations.

To sign a $20 billion deal on the eve of Mr Trump’s second presidency is undoubtedly a significant achievement and another vote of confidence in Emirati business. In a rapidly changing world, progress will lie on such fruitful partnerships continuing.