OpenAI is in discussions to establish data centers in the United Arab Emirates to expand its presence in the Middle East.

The company has maintained a relationship with the UAE, highlighted by a partnership in 2023 with Abu Dhabi-based AI firm G42.

G42 received a US$1.5 billion investment from Microsoft, a significant backer of OpenAI.

MGX, linked to a member of the Emirati royal family, also invested in OpenAI and is expected to support the infrastructure effort.

The plan reflects OpenAI’s strategy to work with US-friendly governments on global expansion.

It also ties into a new program to develop localized infrastructure for serving international users more efficiently.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ UAE’s calculated AI pivot represents a new model of economic diversification

The UAE is executing one of the world’s most aggressive AI strategies, appointing the world’s first AI minister in 2017 and developing the competitive open-source Falcon large language model in 2023 1.

This AI push is quantifiably ambitious, with the country aiming for AI to contribute 20% of its non-oil GDP (approximately $91 billion) by 2031, according to government projections 2.

This represents a strategic pivot beyond traditional diversification moves like tourism or financial services that other resource-dependent economies have pursued.

The UAE’s approach leverages its existing wealth and energy resources to proactively build future industries, rather than reactively responding to declining oil revenues. It has spent billions funding the Advanced Technology Research Council to develop competitive AI technology 2.

The OpenAI partnership aligns with the UAE’s broader technology engagement strategy, including Microsoft’s $1.5 billion investment in Abu Dhabi’s G42 AI firm last year and the formation of MGX, an investment vehicle targeting $100 billion in tech assets 1.

2️⃣ The global AI infrastructure race increasingly intersects with geopolitics

OpenAI’s potential UAE data center reflects a broader trend where AI infrastructure decisions are influenced by both technical and geopolitical considerations.