Reporter’s In Dubai’s sun and sand, AI, server farms, and optimism bloom

06/08 04:15 - Reporter’s In Dubai’s sun and sand, AI, server farms, and optimism bloom
Walking around Dubai, it’s hard to believe a war is still going on in neighboring countries. No missiles have struck the city, and it was clear during a recent visit that local residents are keeping to their routines. The biggest public worry, as it has been in many parts of the world, is the extreme heat. (The high today is around 106 degrees.) Dubai, one of seven emirates in the United Arab Emirates (UAE), continues to emerge as a major global tech hub and is on the verge of becoming a major AI powerhouse. Each of the emirates has their own laws and traditions, with Dubai and Abu Dhabi — the UAE capitol — the most prominent. Other nations recognize the region’s potential and Dubai’s position. The US, for instance, showed interest in currying favor with the UAE by sending a CIA spy to vet the emirate’s top AI firm, paving the way for future chip and AI deals. That outreach, highlighted in a report in The Wall Street Journal, was a hot topic in the local tech community. These days, Dubai and Abu Dhabi hope to position themselves as hubs where people and companies go for AI. Its location makes it an excellent place to do business, with connections to Asia, Europe, and Africa. Broadly speaking, the UAE wants to be something of a Switzerland for AI, or “a neutral AI corridor between East and West,” Mahmood Abdulla, a regional technology expert, explained in a 2025 LinkedIn entry. Data center buildouts While states like New York are putting a moratorium on the construction of data centers in the US, the UAE is moving in the opposite direction; an aggressive AI data center buildout has government backing. Stargate UAE, a data center project that involves top tech firms such as OpenAI and Oracle, is being built in Abu Dhabi. The city has essentially planned out a business model designed to turn AI into hard cash with a focus on the energy resources that will play a major role in the effort. The plan is to redirect Abu Dhabi’s vast energy resources — it has up to 100 billion barrels of known oil reserves — to data centers generating AI tokens. Those tokens can then be sold as compute resources to produce revenue. With oil markets volatile because of ongoing conflicts and the worldwide rise of renewables, pushing energy use to AI data centers might be a more reliable form of revenue long term. Will it work? That remains to be seen. But unlike the US backlash against data centers construction in many place, a ban here seems unlikely. The entrepreneurial spirit Technological innovations from entrepreneurs have been at the core of Dubai’s rapid growth in recent years as a global business center. Here, AI is already quietly woven into daily life, much as it is in China, where AI is already in factories, homes, and infrastructure. One founder told me that naming his company to include “AI” is more of a US thing. UAE companies focus less on boasting about AI models and superintelligence; they tend to emphasize user experiences. On a separate track, Dubai is already targeting the launch later this year of robotic air taxis flying from the airport into the city. (That’s ahead of New York City, where electric air taxis are still being tested.) Still, Dubai is behind the US when it comes to autonomous ground transport. The first autonomous taxis hit Dubai streets just last year, and there are a limited number operating in tourist areas. A complicating face tor for the area remains the Iran war. Dubai’s Internet City, a hub with buildings belonging to the likes of Microsoft, Oracle and IBM, largely emptied when the war started in late February. Foreign tech workers left, and property prices declined. But the real estate market is booming as opportunistic investors buy low. Their bet: the US-Iran war won’t stop the UAE’s growth. Money is flowing into the area in other ways. Heavy tax burdens in Western countries are pushing wealthy founders to move businesses to Dubai’s tax-free environments. And Dubai is opening the door to those with digital nomad and freelance visas. Although visas can cost thousands of dollars a year, lower rent and healthcare costs compared to the US can offset those costs. Rivals are emerging, too UAE’s economic rival, Saudi Arabia is also rising as a tech powerhouse. Riyadh has undertaken reforms at a rapid pace to become an attractive place to do business under its Vision 2030 program. Saudi Arabia requires corporations to have regional headquarters in the country to win government contracts, a policy that challenges Dubai’s status as a regional business hub. The UAE also relies heavily on immigrants and human labor, which can be both a plus as well as a challenge. There is no pathway for entrepreneurs or long-time tech workers to retire here, which can undermine worker motivations to stay. Still, the attractive business environment, combined with local infrastructure and a skilled labor force, make this area appealing. As one founder told me, if the US doesn’t want its most skilled immigrants, the UAE will be happy to welcome them with open arms. ...