Microsoft’s $15.2 billion investment in the UAE turns the Gulf state into a test case for US AI diplomacy.

Microsoft intends to invest $15.2 billion in the UAE over the next four years, the company announced Monday at the first annual Abu Dhabi Global Artificial Intelligence Summit. The investment will include the first-ever shipments of Nvidia’s most advanced GPUs to the UAE.

As part of the deal, the US granted Microsoft a license to export Nvidia chips to the UAE, a move that makes the country a proving ground for US export control diplomacy and a regional anchor for US AI influence.

The deal allows Microsoft to expand its foothold in the Middle East, a key region in the global battle for artificial intelligence dominance. In May, President Donald Trump concluded an agreement with UAE President Sheikh Mohammed bin Zayed Al Nahyan to build an artificial intelligence data center in Abu Dhabi. The project has been delayed due to US export controls, which have restricted the sale of powerful Nvidia chips needed to power advanced artificial intelligence systems.

Microsoft became the first company to obtain a license from the US Department of Commerce to ship chips to the United Arab Emirates in September. The move comes as critics say the deal undermines the logic of US export restrictions to China by introducing potential back channels through a Chinese ally.

Microsoft said in a statement that it had done significant work to meet the robust cybersecurity and national security requirements required by the licenses, enabling the company to assemble the equivalent of 21,500 Nvidia A100 GPUs in the UAE, based on a mix of A100, H100 and H200 chipsets.

Microsoft said it uses the chips to provide access to AI models from OpenAI, Anthropic, open source providers, and itself.

The figure includes $15.2 billion in money that Microsoft has begun spending in the UAE starting in 2023 as part of a new artificial intelligence initiative in the country. Between 2023 and the end of 2025, Microsoft will have spent just over $7.3 billion in the UAE, including a $1.5 billion investment in G42, the UAE’s sovereign AI company, and more than $4.6 billion in capital toward data centers.

As part of the new deal, Microsoft pledges to spend an additional $7.9 billion in the UAE from the beginning of 2026 to the end of 2029, including $5.5 billion in capital expenditures for the continued and planned expansion of artificial intelligence and cloud infrastructure. Microsoft hinted at new steps that it will announce in Abu Dhabi this week.

Microsoft’s work in the UAE goes beyond just building data centres. The company says it combines massive AI infrastructure with deep investment in local talent, training and governance. The company pledges to train one million residents by 2027 and use Abu Dhabi as a regional hub for artificial intelligence research and model development.

The investment comes on the same day Microsoft signed a $9.7 billion deal with Australia’s IREN network for AI cloud capacity.