US-UAE AI Data Campus Deal Faces Delays Amid Security Concerns
A multi-billion dollar agreement to establish one of the world’s largest artificial intelligence data center hubs in the United Arab Emirates (UAE) remains far from finalized, according to sources familiar with the negotiations. Despite its high-profile announcement during President Donald Trump’s recent visit to Abu Dhabi, persistent U.S. security concerns continue to stall progress.
The planned 10-square-mile AI campus is being spearheaded by G42, an Emirati state-linked technology firm central to the UAE’s AI ambitions. Major U.S. technology firms including Nvidia, OpenAI, Cisco, Oracle, and Japan’s SoftBank have signed on to help develop the first phase, called Stargate UAE, which is scheduled to become operational in 2026.
The project’s backers have touted it as a significant step toward steering Gulf nations toward U.S. technology and away from Chinese alternatives. However, five sources involved in the discussions told Reuters that U.S. officials remain deeply concerned about potential technology transfers to China and the UAE’s ability to enforce strict export controls.
Although the UAE pledged during Trump’s visit to align its national security regulations with Washington — including measures to prevent diversion of U.S.-origin technology — American officials remain cautious. These concerns mirror those raised during both the Biden and Trump administrations, particularly over the UAE’s previous deployment of Huawei 5G infrastructure despite U.S. objections.
Sources indicated that the U.S. Commerce Department has yet to determine the security protocols required for exporting advanced Nvidia AI chips critical to the project. The absence of an agreed enforcement mechanism further complicates the deal, leaving it without a definitive timeline for completion.
Among the likely U.S. conditions are prohibitions on Chinese technology at the site and restrictions on employing Chinese nationals, given ongoing fears of AI chip smuggling and intellectual property leaks to adversaries. While the UAE has dismantled some Chinese partnerships—such as G42 removing Chinese hardware and divesting from certain Chinese holdings under Biden administration pressure—Chinese firms like Huawei and Alibaba Cloud still maintain a strong presence in the country.
Adding to U.S. unease is the UAE’s growing role as a hub for companies circumventing Western sanctions on Russia, further complicating Washington’s strategic calculus. Despite these challenges, both Trump administration officials and some in the current administration remain committed to pursuing the deal, though bipartisan skepticism remains strong in Congress.
Once operational, Stargate UAE is expected to house roughly 100,000 advanced Nvidia Grace Blackwell GB300 AI chips within a 1-gigawatt facility — potentially expanding to 5 gigawatts in the future. The Emirati government has so far not commented on the latest delays, and no final agreement has been reached on technology controls or operational oversight.
