UAE AI hub: how G42 and Stargate UAE got US chip approval

The UAE did not get advanced AI chips just by building data centres. It also needed US export approvals. The sequence, as official and press sources describe it, runs from a national AI strategy adopted in 2019, through US concern about G42's links to Chinese suppliers, to a November 2025 approval for the equivalent of 35,000 Nvidia chips, and then to a July 2026 rule change that moved the UAE into a friendlier US export group.

Key numbers at a glance

• UAE Minister of State for Artificial Intelligence first appointed: October 2017 (World Government Summit profile of Omar Sultan Al Olama, accessed 19 October 2026).
• National AI Strategy 2031: adopted by the UAE Cabinet in April 2019 with eight strategic objectives (Daily FT, 29 April 2019).
• Microsoft investment in G42: 1.5 billion dollars for a minority stake (Microsoft, 15 April 2024).
• Stargate UAE cluster size: 1 gigawatt (GW), inside a 5 GW UAE to US AI campus in Abu Dhabi (Gulf News, 16 October 2025).
• First phase: 200 megawatts (MW), expected in the third quarter of 2026 according to Mubadala's Khaldoon Al Mubarak (The National, 5 December 2025).
• Site: 19.2 square kilometres, more than 5,000 workers and more than 100,000 cubic metres of concrete (The National, 5 December 2025).
• Chips in the UAE before the approval: "a couple of thousand," per Al Mubarak (The National, 5 December 2025).
• US approval for G42: the equivalent of up to 35,000 Nvidia GB300 (Blackwell) chips, with the same ceiling for Saudi Arabia's Humain (US Commerce Department statement, reprinted by AJOT, 20 November 2025).
• AI Diffusion Rule: rescinded by Commerce on 13 May 2025, two days before compliance was due on 15 May 2025 (BIS, 13 May 2025).
• Export group change: the UAE reclassified into Country Group A:5 (BIS, 10 July 2026).
• Mubadala assets under management: AED 1.2 trillion, about 330 billion dollars, at end 2024 (Mubadala, 8 May 2025).
• MGX fundraising: close to 50 billion dollars from outside investors, per unnamed sources (Bloomberg, 23 June 2026, as reported by Enterprise AM, 25 June 2026).
• Aligned Data Centers: acquired by MGX, AIP and GIP at a value of about 40 billion dollars (Gulf News, 21 July 2026).
• Barakah nuclear plant: 5,600 MW once all four units run, designed to meet 25 percent of UAE electricity needs (NucNet citing ENEC, 25 March 2024).

Some terms first

A megawatt is a unit of electrical power, and a gigawatt is 1,000 megawatts. Data centre builders quote size in power because power limits how many chips can run at once.

An export licence is permission from a government to ship a controlled product to another country. In the United States, the Bureau of Industry and Security (BIS), part of the Commerce Department, runs this system under the Export Administration Regulations. Items on the Commerce Control List each get a classification number, and the rules for each destination depend partly on which country group it sits in. Advanced AI chips are controlled items.

A sovereign wealth fund is an investment fund owned by a state. Mubadala is one of Abu Dhabi's. These funds matter here because the UAE's AI plan is financed and directed largely by state linked entities.

The strategy and the institutions behind it

The UAE started early on the policy side. According to his World Government Summit profile, Omar Sultan Al Olama was appointed Minister of State for Artificial Intelligence in October 2017, and before that he worked on the national AI strategy, which the profile calls "the first such strategy of its kind globally." That is the government's own framing rather than an independent ranking. In July 2020 his portfolio widened to become Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications, the same profile says.

The strategy itself was formally adopted later. Sri Lanka's Daily FT, reporting on 29 April 2019, said the UAE Cabinet, chaired by Sheikh Mohammed bin Rashid Al Maktoum, adopted the National Artificial Intelligence Strategy 2031 with the aim of positioning the UAE as a global leader in AI by 2031. The report listed eight strategic objectives and said the Emirates Council for Artificial Intelligence and Digital Transactions would oversee implementation with local and federal bodies. The first phase named five sectors: resources and energy, logistics and transport, tourism and hospitality, healthcare, and cyber security. The report does not set chip, compute or data centre targets, and nothing in it predicts the scale of what was built after 2024.

Education and research came before the data centres. Khaleej Times reported on 16 October 2019 that Abu Dhabi had announced the Mohamed bin Zayed University of Artificial Intelligence, or MBZUAI, at a press conference in Masdar City. The university described itself as the first graduate level, research based AI university in the world, offering master's and doctoral programmes in machine learning, computer vision and natural language processing. Registration was due to open in August 2020 with the first classes in September 2020. The same report tied the university to the 2031 strategy and noted that the UAE had made AI a national priority in 2017.

The point of this early history is that the policy and talent pieces were in place several years before the large compute projects. The chips came last, and they came through Washington.

The company at the centre: G42

Most of the UAE's chip story runs through one company. G42 is an Abu Dhabi AI and cloud group. Its own website lists Mubadala, Silver Lake, Microsoft and the Dalio Family Office among its investors, and names Peng Xiao as Group Chief Executive Officer. An Associated Press report of 16 April 2024 said the company's board is chaired by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security adviser.

The Microsoft deal is the clearest public marker of G42's turn toward US partners. In a post dated 15 April 2024, Microsoft said it would invest 1.5 billion dollars in G42 for a minority stake, that Microsoft vice chair and president Brad Smith would join G42's board, and that G42 would run its AI applications and services on Microsoft Azure. The post said the partnership was backed by a binding agreement giving assurances to the US and UAE governments on responsible AI, and that the two companies would support a 1 billion dollar fund for developer skills in the UAE and the wider region.

The same week, the AP report said G42 had previously pledged to cut ties with Chinese hardware suppliers after American concerns that it was too close to the Chinese government. That background explains the shape of the later approvals. US officials were not only asking whether the UAE could pay for chips. They were asking whether the chips could be diverted to China and who controlled the systems. Microsoft's investment and G42's supplier pledge can be read as steps in that conversation, though no official source states that either was a formal condition of any later licence.

The export rules the UAE had to work within

In January 2025, the outgoing US administration issued what became known as the AI Diffusion Rule. It would have sorted countries into tiers for advanced chip exports. The Commerce Department rescinded it on 13 May 2025, two days before its compliance requirements were due to take effect on 15 May. In the release, BIS said the rule would have damaged relations with dozens of countries by downgrading them to second tier status, and said a replacement would come later. The release also said BIS would add licensing requirements for AI chip exports to Malaysia and Thailand because of known instances of diversion, and issued guidance on the risks of using certain Chinese advanced chips, including specific Huawei Ascend parts.

That removed a country tier system but not the licence system. Advanced chips remained controlled items, and large sales to the Gulf still needed case by case approval or a specific arrangement.

BIS was also acting on the other side of the same problem. On 25 March 2025 it added 80 entities to its Entity List, a list of parties that need licences for items they would otherwise receive freely. The release says ten entities in China, South Africa and the UAE were added because of links to the Test Flying Academy of South Africa, which had been listed earlier. It does not name the UAE entities. The point is narrow: the same department that later approved large chip flows to named UAE companies was also listing other UAE based parties in a separate matter.

May 2025: the framework and the Stargate announcement

In May 2025, Stargate UAE was announced. Gulf News and The National name the partners as G42, OpenAI, Oracle, Nvidia, Cisco and SoftBank, with G42's data centre company Khazna as developer. The BIS release of July 2026 refers to a US to UAE Artificial Intelligence Cooperation framework signed in May 2025 as the basis for its advanced computing approvals. The framework text itself has not been published in a form that sets out its terms in detail, so this post describes it only as far as the BIS release does.

The project is large. Per The National (5 December 2025), the campus covers 19.2 square kilometres, about nine times the size of Monaco, and the first 200 MW had more than 5,000 workers and over 100,000 cubic metres of concrete behind it. On 16 October 2025, a G42 representative told The National that civil, structural and architectural work was well advanced, that key modular components had entered production, that all long lead equipment had been procured and that the first mechanical systems had arrived on site. G42 said it expected the full 1 GW cluster within three years.

One more detail from Gulf News matters for planning. On 16 October 2025 it reported that no completion timelines had been confirmed for the rest of the 1 GW cluster or for the wider 5 GW campus. Only the first 200 MW had a target date.

November 2025: the 35,000 chip approval

In November 2025 the Commerce Department said it had authorised exports of advanced US semiconductors to two Gulf companies: G42 in the UAE and Humain in Saudi Arabia. The statement, reprinted by the trade publication AJOT on 20 November 2025, set the ceiling for each at the equivalent of up to 35,000 Nvidia Blackwell GB300 chips. It said the approvals "are conditioned on both companies meeting rigorous security and reporting requirements," that BIS would monitor compliance on an ongoing basis, and that the approvals followed US AI partnership agreements with Saudi Arabia and the UAE and were consistent with the July 2025 US AI Action Plan.

Gulf News reported G42 group chief executive Peng Xiao calling the announcement a "defining moment" and saying the company was moving from planning into execution. On 5 December 2025, The National quoted Al Mubarak as saying the UAE then had only a couple of thousand chips, and he compared the jump to going from about 5 kilometres an hour to about 250. The approval, in other words, was the step that could turn a building site into a working computer.

What the public record does not show matters too. Neither Commerce nor the companies have published a licence number, the full list of security conditions or a delivery schedule. There is no public figure for how many of the 35,000 chip equivalents have arrived. The phrase "up to" sets a ceiling, not a delivery. Readers interested in the Saudi half of the same decision can see a related post, Saudi Arabia, Humain and Vision 2030, which covers Humain's plans.

July 2026: moving to Country Group A:5

On 10 July 2026, BIS published a release titled "Department of Commerce Eases Export Controls for UAE." It says the UAE is removed from Country Groups D:3 and D:4, which lifts restrictions linked to support for its drone programmes, and is reclassified into Country Group A:5. The stated basis is the UAE's status as a US Major Defense Partner and its commitment to preventing the diversion and misuse of sensitive US technology.

For AI, the release says that under the May 2025 framework Commerce is approving the UAE Government and certain companies to receive advanced computing items in the UAE without a licence, including chips and servers. It also says A:5 status allows licence free exports and transfers under License Exception Strategic Trade Authorization for certain Commerce controlled military items, certain commercial satellites and spacecraft, and dual use items useful in oil and gas production, desalination and civil nuclear power generation.

Two points need care. First, the release does not state an effective date. It refers readers to a Federal Register notice, number 2026-14132, for implementing detail. Second, "licence free" applies to approved parties, not to anyone in the UAE. On 17 July 2026, G42 published a statement welcoming the step and saying BIS had approved G42 and Core42 as "authorized recipients of advanced computing items under the U.S.-UAE AI framework." That confirms two named companies are approved. It does not give the full list.

Where the money and power come from

On capital, the UAE has several state backed channels. Mubadala said on 8 May 2025 that its assets under management grew 9.1 percent in 2024 to AED 1.2 trillion, which it put at about 330 billion dollars. The same release describes MGX as created by Abu Dhabi's Artificial Intelligence and Advanced Technology Council, with G42 and Mubadala as co-founding partners, and says MGX co-led a 30 billion dollar AI Infrastructure Partnership with Microsoft, BlackRock, GIP, Nvidia and xAI.

MGX has grown since. Enterprise AM, citing a Bloomberg report of 23 June 2026 that relied on unnamed sources, said MGX had raised close to 50 billion dollars from regional sovereign funds, global pension funds and other institutions, and was targeting more than 100 billion dollars in assets. The report cites no MGX statement, so treat the figure as reported. On 21 July 2026, Gulf News reported that MGX, the AI Infrastructure Partnership and BlackRock's Global Infrastructure Partners had completed the purchase of 100 percent of Aligned Data Centers at a value of about 40 billion dollars, with a further 5 billion dollars of growth capital. Aligned is based in Dallas, so this is UAE capital building US capacity, which fits the matching investment language in the BIS release.

On power, no public source states how the Stargate campus will be supplied. What can be said is that the UAE has a large low carbon source on its grid. World Nuclear News, in a report dated 18 May 2026, says Barakah has four Korean designed APR-1400 units in the Al Dhafra region, owned by ENEC and operated by Nawah, with commercial operation dates from April 2021 for Unit 1 to September 2024 for Unit 4. NucNet reported on 25 March 2024 that the fourth unit would bring total capacity to 5,600 MW and more than 40 terawatt hours a year, and quoted ENEC's aim of meeting 25 percent of UAE electricity needs. Enerdata, reporting the fourth unit's commercial start in September 2024, said nuclear supplied 17 percent of UAE power in 2023, when three units were running. The 25 percent figure is a design aim for the full plant, and it is a national statistic, not a statement about the AI campus.

What 2026 has shown about physical risk

Capital and chips are not the only constraints. According to World Nuclear News on 18 May 2026, the UAE said a drone strike caused a fire in an electrical generator outside the inner site perimeter of Barakah. The UAE defence ministry said three drones had entered from the western border and two were intercepted, and the source was under investigation. No injuries were reported, the UAE nuclear regulator said there had been no release of radioactive material, and the IAEA said emergency diesel generators were supplying Unit 3 at the time.

The same report placed the incident in a wider conflict: the United States and Israel attacked Iran on 28 February 2026, Iran retaliated, including against neighbouring states, and an official ceasefire was in place at the time of the report to allow talks. The situation may have changed since that report. For a business reader, the narrow lesson is that large energy and data centre sites in the region now carry a security dimension that sits alongside export rules and power supply. A related post, Qatar, gas and conflict risk, covers the wider regional effects.

What is firm and what is uncertain

Firm, because an official or company source states it:

• BIS rescinded the AI Diffusion Rule on 13 May 2025.
• Commerce authorised exports to G42 of up to 35,000 GB300 equivalent chips in November 2025, subject to security and reporting requirements.
• BIS moved the UAE to Country Group A:5 in a release dated 10 July 2026 and said Commerce is approving the UAE Government and certain companies to receive advanced computing items without a licence.
• G42 said on 17 July 2026 that BIS approved G42 and Core42 as authorised recipients.
• Microsoft invested 1.5 billion dollars in G42, announced 15 April 2024.

Firm as press reporting:

• Stargate UAE has named partners, a 1 GW cluster plan and a 200 MW first phase target for the third quarter of 2026.
• The Cabinet adopted the National AI Strategy 2031 in April 2019.

Uncertain:

• Whether the first 200 MW is energised. No public report found at the time of writing says it is, and none says it is not.
• How many of the approved chips have been delivered.
• The power source for the campus.
• The MGX fundraising figure, which rests on unnamed sources.
• The regional security situation, which has changed several times in 2026.

What to watch next

• A G42, Khazna or OpenAI statement that the first 200 MW is in service, and how many chips are running.
• The Federal Register notice 2026-14132 and any published list of approved companies under the A:5 change.
• Whether the remaining capacity of the 5 GW campus gets named customers or dates.
• BIS and Commerce releases on Saudi Arabia and Qatar, which would show whether the UAE route is being repeated.
• IAEA and World Nuclear News updates on Barakah and other energy sites in the region.

For comparison with the other Gulf states, see Gulf AI data centres 2026. For the US side of the Stargate name, see OpenAI compute commitments and Stargate. For what chip supply looks like worldwide, see AI chip market share in 2026. For the data rules, see UAE PDPL and sector data localisation.

Quick check

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Sources

• Department of Commerce Eases Export Controls for UAE, Bureau of Industry and Security, 10 July 2026
• Department of Commerce Announces Rescission of Biden-Era Artificial Intelligence Diffusion Rule, Bureau of Industry and Security, 13 May 2025
• Commerce Further Restricts China's Super Intelligence and Advanced Computing Capabilities, Bureau of Industry and Security, 25 March 2025
• Statement on UAE and Saudi chip exports, US Commerce Department statement reprinted by AJOT, 20 November 2025
• G42 gets US approval for advanced AI chip exports, Gulf News, 20 November 2025
• G42 welcomes a new milestone in the US-UAE AI partnership, G42, 17 July 2026
• About G42, G42, accessed 19 October 2026
• Microsoft and G42 partner to accelerate AI innovation in UAE and beyond, Microsoft, 15 April 2024
• Microsoft invests $1.5bn in Abu Dhabi-based AI firm G42, Associated Press via BreakingNews.ie, 16 April 2024
• Omar Sultan Al Olama, World Government Summit, accessed 19 October 2026
• UAE adopts National Artificial Intelligence Strategy 2031, aims leadership, Daily FT, 29 April 2019
• World's first artificial intelligence varsity in Abu Dhabi, Khaleej Times, 16 October 2019
• Stargate UAE's first phase to be completed in third quarter of 2026, The National, 5 December 2025
• G42 unit Khazna targets full build out of 1GW Stargate UAE project in three years, The National, 16 October 2025
• Stargate UAE first phase of 200MW to complete by 2026, Gulf News, 16 October 2025
• Mubadala Investment Company reports 2024 financial results, Mubadala, 8 May 2025
• MGX raises nearly USD 50 bn to accelerate its AI investment push, Enterprise AM citing Bloomberg, 25 June 2026
• MGX, AIP and BlackRock's GIP close 40 billion dollar Aligned Data Centres deal, Gulf News, 21 July 2026
• Barakah 4 delivers first electricity to national grid as commercial operation approaches, NucNet, 25 March 2024
• UAE hails historic milestone as fourth and final reactor begins operation, NucNet, 5 September 2024
• Barakah 4 nuclear unit in UAE enters commercial operations, Enerdata, 6 September 2024
• IAEA concern after drone strike close to Barakah nuclear power plant, World Nuclear News, 18 May 2026

Last reviewed: 19 October 2026.