Trump's Return and the US-UAE Alliance: Implications for the Middle East
This investment represents a step towards the IMEC data corridor, with the UAE envisioning itself as the region’s data hub.
US President-elect Donald Trump recently announced that Emirati billionaire Husain Sajwani, the founder of Dubai-based DAMAC Properties, has pledged to invest $20 billion in American data centres. Trump attributed the investment decision, which would boost current Emirati stock FDI in the US by more than 50%, to his election victory. This significant move is part of the United Arab Emirates' broader strategy to position itself as a major trade and data hub under the IMEC and the Abraham market umbrella while embedding itself in global technology supply chains to ensure regime stability. In response, regional rival Saudi Arabia may begin making similar investments in the US to strengthen its position and keep pace. Both of these developments are expected to renew and intensify interest in the expansion of the Abraham Accords when President Trump returns to office later this month. Furthermore, BRICS-UAE ties are likely to be negatively impacted by the UAE’s push away of their technology.
UAE-US-IMEC Technology Hub Ambitions
The recent investment is particularly significant, given that current Emirati investment in the US is around $25 billion, highlighting the UAE’s intention to strengthen its ties with the US in future technologies related to the recent defence pact signed by the pair a few months ago. The investment supplements previous deals such as the one signed between Microsoft and Abu Dhabi's MGX to back a $30 billion BlackRock AI infrastructure fund.
By embedding itself within critical tech supply chains, the UAE aims to diversify its economy beyond oil while enhancing its geopolitical leverage and regime stability, all as it seeks to replicate its learning from US investments into establishing the IMEC’s data corridor which includes building data centers and laying land cables to connect the IMEC countries.
The Emirates' focus on technological infrastructure, including data centres, supports its long-term ambition to become a global leader in emerging industries like artificial intelligence and digital services, further reinforcing its position as a regional economic hub. Furthermore, it cements the UAE position as a global hub for financial transactions which cannot be avoided.
The Growing US-UAE Alliance: Regional Implications
Enhanced US-UAE relations, building upon their recent milestone of a strategic defence partnership, could have far-reaching repercussions across the region, including the potential retreat of BRICS and the expansion of the Abraham Market. Trump is seeking to isolate China and limit its access to the global data market, leveraging the UAE's capital and strategic position to achieve these goals. Furthermore, this investment represents a step towards the IMEC data corridor, with the UAE envisioning itself as the region’s data hub and aspiring to establish itself as a cyber superpower.
The UAE-BRICS technology collaboration will likely be reduced. Concerns have been raised over the UAE's collaborations with Chinese technology firms, especially in areas related to artificial intelligence and telecommunications. For instance, the partnership between Microsoft's $1.5 billion investment in the UAE-based AI firm G42 faced criticism due to G42's previous ties with China's Huawei. In response to these concerns, G42 agreed to sever its connections with Huawei to facilitate the deal, highlighting the geopolitical complexities influencing UAE-BRICS technology cooperation.
