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Massive AI campus announced during Trump visit

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Deal worth billions of dollars to U.S. tech firms

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AI core to UAE's economic development strategy

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Opposition within Washington against the deal

By Alexander Cornwell

ABU DHABI, June 6 (Reuters) - A multi-billion dollar

deal to build one of the world's largest data centre hubs in the

United Arab Emirates with U.S. technology is far from being

concluded due to persistent concerns around security, sources

familiar with the matter told Reuters.

The U.S. and the wealthy Gulf state unveiled the massive

artificial intelligence campus project set to contain a cluster

of powerful data centres during President Donald Trump's two-day

visit to Abu Dhabi last month.

The planned 10-square-mile (26-sq-km) site is being funded

by G42, an Emirati state-linked tech firm that is driving the

development of its artificial intelligence industry.

Technology giants Nvidia ( NVDA ), OpenAI, Cisco ( CSCO ),

and Oracle, along with Japan's SoftBank, are working

with G42 to build the first phase, known as Stargate UAE, set to

go online in 2026.

The project, which plans to use advanced Nvidia AI chips,

has been promoted by Trump officials as a win in steering Gulf

states toward U.S. technology over Chinese alternatives.

But according to five sources briefed on the project, U.S.

officials have yet to determine the security conditions to

export the advanced chips or how the agreement with the Gulf

state will be enforced, leaving the deal far from resolved.

During Trump's visit, Abu Dhabi pledged to align its

national security regulations with Washington, including

safeguards to prevent the diversion of U.S.-origin technology.

But U.S. officials remain cautious about the UAE's close

relationship with China, four of the sources said, noting that

the concerns are consistent with those raised during both the

Biden administration and Trump's first term, primarily around

the Gulf state's reliability as a strategic partner.

The sources did not specify whether new evidence had

emerged, but said existing concerns remain unresolved. During

Trump's first term, the UAE and other Gulf states moved forward

with deploying Huawei 5G technology despite U.S. objections.

Others in the administration also doubt whether the UAE,

despite its intentions, can prevent U.S. technology from

reaching Washington's adversaries, four of the sources said.

A White House spokesperson referred Reuters to the Commerce

Department, which did not respond to a request for comment.

Neither did the UAE government.

Four sources said the U.S. administration had no clear

timeline for finalising the deal. Abu Dhabi would need to accept

yet-to-be-defined U.S. controls on the technology, but it could

also request amendments that may delay final approval, they

said.

Two sources said U.S. controls would likely prohibit the use

of Chinese technology and restrict the employment of Chinese

nationals at the site that is being referred to as an AI campus.

The administration remains committed to concluding the deal,

four of the sources said, but noted there was opposition among

Republicans and Democrats over concerns regarding the UAE's ties

with China.

Stargate UAE is scheduled to come online next year with an

estimated 100,000 advanced Nvidia ( NVDA ) chips. The 1-gigawatt project

will use Nvidia's ( NVDA ) Grace Blackwell GB300 systems, currently the

most advanced AI server that Nvidia ( NVDA ) offers.

Although smaller than the U.S. state of Maine, the UAE is a

influential Middle Eastern player known for its strategic

hedging that has seen it forge close ties with China and Russia.

Last year, under pressure from the Biden administration, G42

ripped out Chinese hardware and sold its Chinese investments.

In return, it gained better access to advanced American

technology, while Microsoft ( MSFT ) acquired a $1.5 billion

stake in G42.

Nevertheless, major Chinese firms Huawei and Alibaba Cloud

remain active in the Gulf state, and an organised AI chip

smuggling ring to China has been tracked out of countries

including the UAE.

The Gulf state has also become a hub for companies evading

sanctions imposed on Russia since 2022 over the war in Ukraine.

The Trump administration has said that American companies

would operate the Emirati-built data centres and offer

"American-managed" cloud services throughout the region.

The so-called AI campus in Abu Dhabi is supposed to

eventually host 5 gigawatts worth of data centres.