OpenAI is currently in discussions to set up data centers in the United Arab Emirates as part of its strategy to expand its presence in the Middle East. This initiative highlights OpenAI’s ongoing relationship with the UAE, which includes a partnership established in 2023 with G42, an artificial intelligence firm based in Abu Dhabi.

G42 has received a significant investment of US$1.5 billion from Microsoft, which is a major supporter of OpenAI. Additionally, MGX, an investment firm associated with a member of the Emirati royal family, has also invested in OpenAI and is expected to play a role in supporting the infrastructure development.

This plan is indicative of OpenAI’s broader strategy to collaborate with governments that are friendly to the United States as part of its global expansion efforts. It is also linked to a new initiative aimed at developing localized infrastructure to better serve international users.

The UAE is executing an ambitious AI strategy, having appointed the first AI minister in the world in 2017 and developed the competitive open-source Falcon large language model in 2023. The UAE aims for AI to contribute 20% of its non-oil GDP, equivalent to approximately $91 billion, by 2031, as projected by government estimates.

Moreover, the UAE has committed “tens of billions” toward AI development in alignment with U.S. standards and security concerns, reflecting a strategic pivot towards enhancing its technology sector. This partnership with OpenAI aligns with the UAE’s broader technology engagement strategy, which has already seen Microsoft’s investment in G42 and the formation of MGX, targeting $100 billion in tech assets.

As OpenAI explores its expansion, it emphasizes partnerships with governments viewed favorably by the U.S., while also addressing local industries and data sovereignty needs through the establishment of data centers.