Peng Xiao started the year riding high. G42, the Abu Dhabi technology conglomerate he runs, had just won approval to import thousands of the latest artificial intelligence chips and begun talks to buy many more. Xiao was also gearing up for global expansion, taking his company to new markets and aiming to make a splash in the US. Most immediately, G42 was preparing to break ground on one of the world’s largest AI data center projects: a five-gigawatt campus in the United Arab Emirates that would host OpenAI and other Silicon Valley titans.
“There’s a reason that everyone from Sam Altman to Elon Musk comes to this region and talks to us,” Xiao said during a January interview at his beachfront office. “The US, as a home base, cannot provide everything they need.”
Weeks later the US and Israel began bombing Iran, touching off a regional war that quickly spilled into the UAE. Since the conflict began, Iran has hit airports, ports and at least one data center there. Suddenly G42, the UAE’s AI national champion, looked vulnerable. While the US and Iran have agreed to a two-week ceasefire, the conflict’s repercussions will probably echo for some time — potentially impeding the UAE’s multibillion-dollar plans to transform itself from petrostate to global AI powerhouse.
G42 didn’t make Xiao available for a follow-up interview but maintains the regional tensions won’t derail its plans. “Our direction is unchanged and our pace has accelerated,” a company spokesperson said in an emailed statement. “Moments like these reinforce that what we are building matters. Our responsibility is to continue operating with discipline, serving our customers and advancing infrastructure that strengthens the societies we work in.”
Some US officials have also projected optimism. “Once this conflict winds down, I actually have an enormous amount of confidence in the business climate in the UAE,” Jacob Helberg, the US Under Secretary of State for Economic Affairs, said at a briefing in London in late March. Regional companies continue to make deals, including a recent investment in US fitness band maker Whoop Inc. by 2PointZero Group PJSC, an Abu Dhabi firm.
“There’s a reason that everyone from Sam Altman to Elon Musk comes to this region and talks to us,” Xiao said during a January interview at his beachfront office. “The US, as a home base, cannot provide everything they need.”
Weeks later the US and Israel began bombing Iran, touching off a regional war that quickly spilled into the UAE. Since the conflict began, Iran has hit airports, ports and at least one data center there. Suddenly G42, the UAE’s AI national champion, looked vulnerable. While the US and Iran have agreed to a two-week ceasefire, the conflict’s repercussions will probably echo for some time — potentially impeding the UAE’s multibillion-dollar plans to transform itself from petrostate to global AI powerhouse.
G42 didn’t make Xiao available for a follow-up interview but maintains the regional tensions won’t derail its plans. “Our direction is unchanged and our pace has accelerated,” a company spokesperson said in an emailed statement. “Moments like these reinforce that what we are building matters. Our responsibility is to continue operating with discipline, serving our customers and advancing infrastructure that strengthens the societies we work in.”
Some US officials have also projected optimism. “Once this conflict winds down, I actually have an enormous amount of confidence in the business climate in the UAE,” Jacob Helberg, the US Under Secretary of State for Economic Affairs, said at a briefing in London in late March. Regional companies continue to make deals, including a recent investment in US fitness band maker Whoop Inc. by 2PointZero Group PJSC, an Abu Dhabi firm.
That was always a reach. Heavily reliant on local customers, G42’s offerings more closely resemble consulting services than the technical breakthroughs of, say, an OpenAI or Google. The company’s management and priorities have shifted many times since its 2018 founding, leaving its clients — and sometimes staff — in the dark about strategy, according to people who worked with and for the company.
G42 is supposed to be the core of the UAE’s efforts to seed a homegrown research base, which includes a university focused on artificial intelligence. The nation has earned high marks for adopting AI tools. But despite offering high salaries and low taxes, the UAE isn’t seen as a global destination for top AI engineering talent.
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