Nvidia, Oracle--Backed Multi-Billion Dollar UAE AI Project Stalls Over Security Snag

AI Gold Rush Hit by Export Restrictions as Stargate UAE Data Center Deal Derails

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Jun 09, 2025
Summary
  • Multi-Billion Dollar UAE AI Campus on Ice Pending Unresolved Chip Export Conditions
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June 9 - A multi-billion-dollar plan to build a massive AI data center hub in the UAE using U.S. technology remains far from finalized due to unresolved security concerns, according to a Friday report by Reuters.

The project, dubbed Stargate UAE, brings together Nvidia (NVDA, Financial), Oracle (ORCL, Financial), OpenAI, Cisco Systems (CSCO, Financial), SoftBank Group (SFTBY, Financial) and Abu Dhabi's G42 to construct a 1-gigawatt compute cluster. In reality, the entire 10-square-mile site will eventually host up to 5 gigawatts worth of data centers. The first 200-megawatt phase of Stargate UAE is slated to go live in 2026, with subsequent capacity added in stages.

U.S. officials have yet to settle on security conditions for exporting advanced AI chips or agree on enforcement measures, leaving the deal's framework in limbo. Under the “U.S.-UAE AI Acceleration Partnership,” Abu Dhabi pledged to align its security protocols with Washington's standards. However, lingering concerns about the UAE's close ties to China and past use of Huawei technology continue to stall progress.

Despite the delays, participants view Stargate UAE as a strategic move to anchor high-performance compute in the Middle East. G42 executives have emphasized that, once fully operational, the 5 gigawatts of compute capacity will support both local AI research and global cloud services. Yet until Washington finalizes export controls and enforcement guidelines, construction timelines beyond the initial 200 megawatts remain uncertain.

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