Microsoft commits to spend USD8b on cloud, chips, in UAE
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The news: Microsoft will spend over USD7.9 billion ($12.08 billion) on data centres, cloud-computing and employees in the United Arab Emirates over the next four years and will ship the latest Nvidia chips to the Gulf country for the first time.
The numbers: Microsoft CEO Brad Smith told Bloomberg and the FT on Monday that it will invest a total of USD15.2 billion in the country from 2023 to 2029 as it works to fill a shortage of computing capacity in the country.
Microsoft said it plans to spend more than USD5.5 billion in capital expenditures on cloud and AI infrastructure from the start of 2026 through 2029, according to Smith, and will invest another USD2.4 billion on operating expenses and local hiring.
Microsoft said it has invested roughly USD5.8 billion in the UAE since the beginning of 2023.
The context: Smith told the FT on Monday that the group became “the first company to receive a licence under the Trump administration” to export Nvidia’s AI chips to the UAE, receiving approval in September.
While US President Donald Trump had reached deal with UAE president Sheikh Mohamed bin Zayed al-Nahyan in May to build an AI data centre campus in Abu Dhabi (Microsoft-backed G42 is a partner in the process), the project had been delayed because of the US government’s export controls on Nvidia AI chips. In 2024, Microsoft invested USD1.5 billion in G42 which is building the Abu Dhabi facility announced in May.
The pledge includes plans to almost triple the number of Nvidia’s advanced chips that Microsoft will operate in the nation, bringing in critical equipment that has been restricted by the US government.
Earlier on Monday, Microsoft announced a $9.7 billion deal with IREN, to deal to buy AI cloud capacity from the Australian data centre operator, making it the Australian company’s largest customer.
What they said: “This is not money we’re raising here. It’s money we’re investing and spending here,” Smith told Bloomberg in Abu Dhabi on Monday. “We are seeing demand here explode.”
“We run a risk that AI diffusion will become increasingly uneven…There obviously is a race between the US and China.”
“People often focus for first and foremost on the race for advanced AI model development…But I think the AI diffusion race is probably even more important than the race on the technology frontier. And this is where the stronger relationship between the United States and the United Arab Emirates becomes critical,” Smith told Bloomberg.
