UAE’s Big AI Data Center Project Faces U.S. Security Delay

Post by : Bandanpreet Kaur

Photo: AP

The United Arab Emirates (UAE) has a huge plan to build one of the world’s biggest AI data center hubs. This mega project is called Stargate UAE. Big U.S. tech companies like Nvidia, Oracle, OpenAI, Cisco, and SoftBank are part of this plan, along with G42, a top AI company based in Abu Dhabi.

They want to build a very large data center that will cover a 10-square-mile area. In the end, this entire area will hold up to 5 gigawatts of computing power. That’s a lot of power needed to run artificial intelligence tools and big cloud services.

The first part of the project is a 200-megawatt section, which is planned to start working in 2026. After that, more power will be added step by step until it reaches the full 5 gigawatts.

But there is one big problem: the project has not been fully approved yet. This is because the U.S. government is still trying to decide on security rules. They are worried about sending powerful AI chips to the UAE without strong safety rules in place.

The UAE has promised to follow U.S. security standards as part of their AI Acceleration Partnership, but U.S. officials are still unsure. They are especially concerned because of the UAE’s past use of Huawei technology from China and its close relationship with China.

Because of this, final decisions about exporting AI chips and who will check if the rules are followed have not been made. Until that happens, the project can only move ahead with the first 200 megawatts. The rest of the work is on hold.

Even with these delays, all the companies involved still believe this project is very important. They think Stargate UAE will help the Middle East become a strong center for AI research and cloud services in the future.

Meanwhile, Nvidia, one of the companies in the project, is doing well in the stock market. Based on price targets from 52 analysts, Nvidia’s stock could rise by about 23%, reaching an average price of $174.71 in one year. Some experts even believe the stock could go as high as $372.87. Another group, GuruFocus, has estimated Nvidia’s value could rise 92.92%, reaching $273.40.

So, while there are delays in the big UAE AI project, companies like Nvidia are still expected to grow, and everyone is watching closely to see what happens next.

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