Microsoft is expanding its footprint in the Middle East, planning to spend over $7.9 billion in the United Arab Emirates (UAE) by 2029 on cloud infrastructure, AI chips, and local talent development.
According to Microsoft President Brad Smith, the plan isn’t about raising capital but about direct local spending. “We’re seeing an explosion in demand here,” Smith told Bloomberg on the sidelines of the Adipec conference in Abu Dhabi.
The breakdown includes roughly $5.5 billion in capital expenditures for cloud and AI infrastructure, and another $2.4 billion for operating costs and new hires. With these commitments, Microsoft’s total investment in the UAE between 2023 and 2029 will reach about $15.2 billion.
The tech giant has become a key partner in the UAE’s long-term digital transformation strategy, which aims to diversify the economy away from oil. Earlier in 2024, Microsoft invested $1.5 billion in local AI firm G42, and Smith now sits on its board. OpenAI, which closely collaborates with Microsoft, also chose the UAE as the location for its first data center outside the United States.
US chip export controls remain - Microsoft receives special exemption
A key part of Microsoft’s investment involves increasing its computing capacity with Nvidia chips. In September, the company became the first US firm to receive a 2025 export license for AI chips to the Emirates. The shipment includes 60,400 new processors, among them Nvidia’s upcoming GB300 model, in addition to 21,500 A100-class chips already in use.
Smith said the exports come with strict security requirements. US regulators remain concerned that sensitive technology could be diverted to China through the region. So far, Emirati companies like G42 are still prohibited from purchasing Nvidia chips directly.
