UAE’s data center project with U.S. tech firms faces security concerns

June 06, 2025 08:43 AM PDT | By Investing

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UAE’s data center project with U.S. tech firms faces security concerns — Image source: Kalkine Media

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Investing.com -- A massive deal to create one of the world’s largest data center hubs in the United Arab Emirates (UAE) with American technology, continues to face persistent security concerns, according to a Friday report by Reuters. The deal, worth billions of dollars, is reportedly far from finalized.

The proposed site, spanning 10 square miles, is financed by G42, a tech company linked to the Emirati state. G42 is spearheading the development of the UAE’s artificial intelligence (AI) industry. Tech giants Nvidia (NASDAQ:NVDA), OpenAI, Cisco (NASDAQ:CSCO), Oracle (NYSE:ORCL), and Japan’s SoftBank (TYO:9984) are collaborating with G42 on the initial phase of the project, dubbed Stargate UAE, which is slated to launch in 2026.

However, U.S. officials are yet to establish the security conditions for exporting the advanced chips or how the agreement with the Gulf state will be enforced. This leaves the deal unresolved. During a visit by then-President Trump, Abu Dhabi pledged to align its national security regulations with Washington’s, including measures to prevent the misuse of U.S. technology.

Concerns remain about the UAE’s close ties with China, with the report noting that these issues have been consistent during both Biden and Trump administrations. The primary concern is the reliability of the Gulf state as a strategic partner.

The report didn’t indicate if new evidence had surfaced, but stated that existing concerns are still not addressed. During Trump’s first term, the UAE and other Gulf states proceeded with the deployment of Huawei 5G technology, despite opposition from the U.S.

Some U.S. officials also question whether the UAE can effectively prevent American technology from reaching Washington’s adversaries, the report added.

This article first appeared in Investing.com

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