Microsoft receives licence to export thousands of AI chips to UAE

Microsoft has secured approval to export tens of thousands of advanced Nvidia AI chips to the UAE, the company said in a statement, adding that it would open the path for more investment in the Gulf state.

Microsoft said the export licence would allow it to spend $7.9bn on data centres, cloud computing and other AI projects in the UAE over the next four years.

“This is not money raised in the UAE. It’s money we’re spending in the UAE,” Microsoft president Brad Smith wrote in a blog post.

Microsoft said the investment was made possible after the Trump administration approved export licences that will allow the firm to ship the equivalent of 60,400 A100 chips to the UAE.

One A100 chip costs upwards of $9,000, according to media reports. The US-listed company makes its chips mainly in Taiwan, but has also expanded its US manufacturing in states like Arizona. Nvidia designs its chips, but outsources their production to the Taiwan Semiconductor Manufacturing Company (TSMC).

The A100 is a powerful graphics processing unit (GPU) designed for artificial intelligence, machine learning and analytics in data centres. Microsoft said the licence also allows it to send Nvidia’s even more advanced GB300 product to the UAE.

Microsoft said that between 2023 and the end of 2025, its spending in the UAE will already be over $7.3bn, a sum that includes a $1.5bn equity stake in G42, the AI company managed by the UAE’s national security advisor, Sheikh Tahnoon bin Zayed al-Nahyan.

“From the start of 2026 to the end of 2029, we will spend more than $7.9bn in the UAE,” Smith said. He noted that this includes more than $5.5bn in capital expenses for “ongoing and planned expansion” of the company's AI and cloud infrastructure, as well as $2.4bn in planned local operating expenses and the cost of goods sold.  

Microsoft’s description of the investment appears to be in keeping with a format US officials have pushed for, where American tech companies would build and manage data centres in Gulf states. This model has been favoured because some US officials do not want to give Gulf states unfettered access to US technology, citing concerns over their ties to China.

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The original agreement signed between the US and UAE envisioned the US exporting 500,000 of Nvidia’s most advanced AI chips there annually, starting in 2025. Of that amount, 400,000 would go to data centres and AI projects managed by US firms inside the UAE.

But a big slice - 100,000 chips - was supposed to go directly to G-42, the state-owned AI firm run by Sheikh Tahnoon. So far, there has been no announcement of G-42 being able to import Nvidia’s most advanced chips directly.

The largest data centre under construction in the UAE is a joint venture between G42, Microsoft, and OpenAI.

Microsoft said it was one of the few companies during the Biden administration to secure export licences from the Commerce Department to ship GPUs to the UAE.

“In no small measure, this is because of the substantial work we did to meet the strong cybersecurity, national security, and other technology conditions required by these licenses,” Smith wrote. He said that during the Biden administration, this allowed Microsoft “to accumulate”  the equivalent of 21,500 Nvidia A100 GPUs in the UAE.

Microsoft said it was the first company under the Trump administration to secure export licences from the Commerce Department to ship GPUs to the UAE.

Gulf states are trying to plough their sovereign wealth fund cash into AI.

The UAE is competing with Saudi Arabia for access to AI chips. Both Gulf states say that their abundant, cheap energy makes them convenient homes for AI companies to build data centres, at a time when American consumers are growing conscious of rising electricity prices.