New US-UAE agreement sure to accelerate G42's US plans
US-UAE AI Acceleration Partnership solves issues, adds opportunities
A landmark US-UAE agreement to deepen bilateral technology cooperation could accelerate Abu Dhabi-based G42’s expansion in the United States. The US-UAE deal includes a reciprocal investment provision committing the UAE to match any investment in building out new data centres in the region, with equivalent investment in the USA. As the preferred contractor for UAE foreign data centre investments, the deal could turbocharge the Emirati firm's US plans.
Formally announced during the official visit of US President Donald J. Trump, a US-UAE AI Acceleration Partnership will bolster cooperation around artificial intelligence and other critical technologies, which includes the building of a UAE-US AI cluster in Abu Dhabi with 5 Gigawatts (GW) of data centre capacity. It’s been widely reported in the US media that the framework will also allow the Emirates to import 500,000 of Nvidia’s most advanced AI processors annually up until 2027, with a potential extension until 2030. The agreement confirms a dramatic reversal of Biden-era restrictions on AI chip export controls that affected UAE buying.
Stargate UAE, the first deal under the new framework, was announced by G42 and five other global technology companies on Thursday. It will be the first international deployment of OpenAI’s Stargate Project, a $500 billion American AI infrastructure initiative announced by President Trump in January. Following a meeting during his UAE visit, G42, Cisco, OpenAI, Oracle, NVIDIA and SoftBank Group have announced a partnership to build the 1GW Stargate UAE facility, bringing 200 Megawatts (MW) of capacity online by 2026.
The UAE is already an active investor in US technology and digital infrastructure. Last year Abu Dhabi’s global technology investment fund MGX, together with BlackRock, Global Infrastructure Partners (GIP) and Microsoft, launched Global AI Infrastructure Investment Partnership (GAIIP) to invest up to $100 billion in AI data centres and supporting energy infrastructure. MGX is also invested in leading AI firms such as OpenAI, Anthropic and Databricks, plus is an early investor in OpenAI’s Stargate project. Abu Dhabi’s AI powerhouse G42 and sovereign wealth fund Mubadala are both founding partners of MGX.
G42’s global expansion
Founded in 2018, G42 has grown rapidly into a formidable AI-focused holding group, employing 25,000 staff and active across data centres and AI infrastructure, sovereign AI and cloud services, public sector digital transformation, smart cities, applied research in AI, cybersecurity, healthcare services and technologies, and geospatial and satellite services. In addition, although not part of the group, G42 was instrumental in establishing the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) and there is a close partnership with the research institution.
The group now operates in dozens of countries globally, increasingly opening up new markets that have signed bilateral trade and technology accords with the UAE. Recent global G42 Group wins include building a big high-performance AI compute facility in Grenoble, France; developing Europe's largest artificial intelligence compute cluster with Italian firm iGenius, a 20-city smart city project in Albania; a smart city deal with the Kazakhstan capital of Astana; plans to build a 100 megawatt AI data centre in Türkiye; plus a landmark digital transformation deal with Uganda signed earlier this month.
Investment in US infrastructure
G42 also has big plans for the US market, opening an engineering office in San Francisco last year, and investing heavily in high performance AI infrastructure via its strategic partnership with Sunnyvale-based AI chip pioneer Cerebras Systems. Even prior to the Biden period of increased export controls on AI technology, G42’s cloud services subsidiary Core42 had partnered with Cerebras to build-out and bring to market a massive supercomputer network offering cloud services for AI model training.
In July 2023, Cerebras and G42 went live with the new high performance computing AI cloud service, starting with the largest supercomputer ever built for AI training. Located in Santa Clara, the 4 exaFLOP, 54 million core Condor Galaxy 1 (or CG-1), gave G42, access to super-fast processing via the cloud.
With a long-term objective of providing 36 exaFLOPS of AI compute, the Condor Galaxy network now has a capacity of 20 exaFLOPs, following the commissioning of three more supercomputer systems, deployed in Stockton, California; Dallas, Texas; and Minneapolis, Minnesota; With short-term plans to add four additional systems in different locations including the network's first international location in France, it seems that the CG network capacity will far exceed the 36 exaFLOPs of compute originally planned.
G42 acquired a 1% stake in Cerebras back in 2021 for $40 million and a convertible purchase agreement was later signed to acquire another 22.9 million shares for $335 million (and depending on the circumstances, will have the option to acquire additional shares at a 17.5% discount). Cerebras is currently planning its IPO.
What began as the UAE's homegrown AI powerhouse has morphed into something even more ambitious. Formed with the clear mandate to become the nation's artificial intelligence champion, G42 delivers the cutting-edge expertise and computational muscle needed to realise the country's vision for AI. But as the UAE's digital diplomacy kicked into high gear, the company's global role expanded dramatically.
As bilateral digital infrastructure deals multiplied, G42 found itself in the international spotlight, tasked with advancing the nation's strategic interests via digital investments and partnerships. Against this backdrop, the group's seemingly lightning-fast global footprint makes perfect sense.
The US-UAE AI economic opportunity
With an imperative to come to an agreement on access to advanced US AI technologies, His Highness Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi, UAE National Security Adviser — and also chairman of G42 and MGX, began more frequent meetings with US government officials last year. However, negotiations took a comprehensive approach, rather than focusing purely on access to AI chips, a framework began to take shape that covered AI governance, ethical development and usage, cybersecurity, clean energy, bilateral technology trade and investment, and cooperation on sustainable capacity building for developing countries.
The $1.5 billion investment by Microsoft in G42 early in 2024 and the addition of its president Brad Smith to the group’s board was absolutely pivotal. Not only did this bring inter-government focus to governance, technology transfer issues and the nature of US AI export controls, but it also helped crystalise the new US-UAE AI economic opportunity.
Shortly after the investment announcement, G42, Microsoft — and the governments of Kenya, the UAE and the USA — announced the largest single private-sector digital investment in East Africa’s history, supporting digital economy development across Kenya. Born out of bilateral trade and investment negotiations between the UAE and Kenya, the deal orchestrated $1 billion of FDI (foreign direct investment) to create a future digital innovation hub with a new Microsoft Azure East Africa Cloud Region, and a data centre that will scale to 1GW capacity.
Building on the UAE’s bilateral AI agreements
These days the UAE government routinely builds technology trade, investment and cooperation frameworks into its bilateral trade agreements, and now has bilateral agreements on digital infrastructure construction, investment and financing with more than a dozen sovereign nations.
For example, in September last year G42 announced plans to build an AI data centre in India of up to 2GW capacity, with up to 8 exaFLOP performance. The deal was negotiated under the technology digital infrastructure agreement signed with the UAE government earlier in the year. The deal built on the Comprehensive Economic Partnership Agreement (CEPA) signed by the two countries in 2022.
Cutting its teeth in building out international AI infrastructure and cloud services closer to home, G42 is now seems ready to take on the world (as evidenced by the global nature of its announcements this year).
Seven years on from its founding, G42 not only has the financial backing of Abu Dhabi, but also deepening relationships with some of the most powerful tech investors in the world, including BlackRock, Microsoft, Silver Lake and SoftBank. It has also become a valuable partner and growing source of revenue for leading US technology firms including AMD, Cerebras, Cisco, Microsoft, Nvidia and Qualcomm, increasingly buying not just for a domestic market, but for a growing market of billions of people, as the group’s overseas activities expand.
In October last year, G42 Group announced the appointment of ex-Microsoft Azure vice president Ali Dalloul as both Chief Strategy Officer and the new CEO of G42 USA. He began his quarter of a century with Microsoft beginning with a five-year stint in the Gulf, and later spending nearly 10 years both developing the software giant’s AI and cloud services strategy, and bringing it to market. With hands-on experience of commercialising Azure’s AI platform, Dalloul could be G42’s perfect US hire.
Solving a thorny issue
Nevertheless, despite G42 Group’s scale, backing, access to capital and cutting-edge technology implementation, the lack of reliable and timely access to high-end AI processors from US technology vendors has been the thorn in its side.
Core42 took delivery of a 55.81 petaFLOP NVIDIA DGX SuperPOD (with 185,712 Intel and Nvidia H100 Tensor Core processors) during the second half of last year, following a lengthy US export approvals process. The SuperPOD was essential to underpin the company’s sovereign AI and cloud offering.
The new UAE AI Acceleration Partnership would seem to solve the problem of access to advanced AI technology and — together with other changes being made by the Trump administration — also the undue delays in processing export requests. The deal will allow the UAE to import 500,000 of Nvidia’s most advanced AI processors per year. Under the framework, 80% of that compute must be managed by US technology firms, but that leaves 100,000 AI chips that could be acquired by G42.
In return, the US continues to get the lion’s share of the UAE’s spending on technology, a framework that helps accelerate AI-related business between the two countries, and comprehensive guarantees on governance. In addition, there is the reciprocal investment clause in the agreement. For every dollar of investment that the UAE makes in building out data centres in the region, it will invest a dollar in AI infrastructure in the United States.
The stars align
Today, with the new UAE AI Acceleration Partnership in place, a commitment from the UAE to invest $1.4 trillion in the USA over the next ten years, and the Trump administration’s promise of a fast-track for approvals of inbound US investment, it looks like the stars have aligned for G42’s US ambitions.
The group now has the expertise, partnerships, funding, services portfolio and leadership to tackle US projects. It can also offer some distinct advantages, such as Core42's sovereign cloud services, which allow enterprises to innovate using cutting-edge AI and cloud capabilities, whilst ensuring digital sovereignty. The cherry on top of the cake is that G42 may well, also receive a government mandate to build out infrastructure in the USA in order to comply with the AI Acceleration Partnership.
We can be sure that the pioneering Abu Dhabi group, is wasting no time in grasping the new opportunities.
[Written and edited by a human]
Read more about recent US-UAE agreements:
Tech leaders unite to build Stargate UAE AI hub (Middle East AI News)
UAE-US to launch AI cluster with 5GW data centre (Middle East AI News)
UAE, US on verge of 500,000 AI chip annual quota deal (Middle East AI News)
UAE commits to $1.4 trillion in US investment, over 10 years (Middle East AI News)