A multi-billion dollar deal to create one of the world’s largest data center hubs in the United Arab Emirates using U.S. technology remains incomplete due to ongoing security concerns.
The U.S. and the wealthy Gulf state announced the massive artificial intelligence campus project during President Donald Trump’s two-day visit to Abu Dhabi last month. The planned 10-square-mile site is being funded by G42, an Emirati tech firm closely tied to the state and driving its AI ambitions.
Major technology players including Nvidia, OpenAI, Cisco, Oracle, and Japan’s SoftBank are collaborating with G42 on the first phase of the project, known as Stargate UAE, which is scheduled to launch in 2026.
The initiative is set to utilize advanced Nvidia AI chips and has been presented by Trump officials as a strategic win in promoting U.S. technology over Chinese competitors in the Gulf region.
However, five sources briefed on the project said that U.S. officials have not yet agreed on the security terms required to export the chips or how the broader agreement with the UAE will be enforced. During Trump’s visit, Abu Dhabi committed to aligning its national security regulations with those of the U.S., including measures to prevent U.S.-origin technology from being diverted.
Despite this pledge, U.S. officials remain wary of the UAE’s close ties with China, according to four of the sources. These concerns are not new and echo issues raised during both the Biden administration and Trump’s first term, mainly focused on whether the UAE can be trusted as a strategic partner.
The sources did not cite any new evidence but said that unresolved concerns from previous years persist. During Trump’s first term, the UAE and other Gulf nations proceeded with Huawei 5G deployments despite U.S. pushback.
Additionally, four sources noted skepticism within the administration about the UAE’s ability to prevent American technology from reaching adversarial nations. A White House spokesperson directed Reuters to the Commerce Department, which did not respond to inquiries. The UAE government also declined to comment.
According to four sources, the U.S. has no definitive timeline for finalizing the agreement. Abu Dhabi would need to accept new, as yet unspecified, controls from Washington. However, the UAE could request changes that might delay approval further.
Two sources mentioned that these controls would likely include a ban on Chinese technology and limits on the employment of Chinese nationals at the AI campus.
While the U.S. administration is still committed to pushing the deal forward, four sources acknowledged there is bipartisan concern in Congress regarding the UAE’s close relationship with China.
Stargate UAE is expected to begin operations next year, equipped with around 100,000 advanced Nvidia chips. The project, delivering one gigawatt of computing power, will use Nvidia’s Grace Blackwell GB300 systems, which are among the most advanced AI servers available. Though smaller than the U.S. state of Maine, the UAE plays a major role in the Middle East and is known for balancing relations with both China and Russia.
Last year, under pressure from the Biden administration, G42 removed Chinese hardware and divested from its Chinese holdings. In exchange, the company gained improved access to advanced U.S. technology, and Microsoft made a $1.5 billion investment in G42.
Still, Chinese firms like Huawei and Alibaba Cloud remain active in the UAE. Authorities have also traced organized efforts to smuggle AI chips to China through countries including the UAE.
The Gulf state has increasingly served as a base for companies seeking to bypass sanctions imposed on Russia following its invasion of Ukraine in 2022.
According to the Trump administration, American companies would operate the data centers built by the UAE and provide cloud services managed by U.S. personnel across the region.
The AI campus in Abu Dhabi is ultimately expected to support up to 5 gigawatts of data center capacity.
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