Both ADQ and ECP will initially invest a combined $5 billion, and the total $25 billion will mainly be on US assets.
Artificial Intelligence (AI) is a cake of which everybody wants a slice. Countries are leaving no stone unturned to make the most of this upcoming innovation. Various international public-private partnerships are being forged to improve collaboration and share technical know-how. The UAE, like all other countries, is also trying its best to integrate AI into technological development and enhancement of infrastructure across the sectors.
Abu Dhabi’s sovereign wealth fund ADQ has signed a $25 billion deal with the US private equity firm Energy Capital Partners (ECP) to invest in power generation and other AI projects. In a statement released by ADQ, it was confirmed that the investments will be implemented as a 50-50 partnership, resulting in 25 gigawatts worth of new power generation and energy infrastructure projects. Both ADQ and ECP will initially invest a combined $5 billion, and the total $25 billion will mainly be on US assets.
The deal was signed after newly elected US President Donald Trump hosted Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser and a brother to its president, Sheikh Mohamed bin Zayed Al Nahyan, at the White House. Sheikh Tahnoon bin Zayed chairs the ADQ which is valued at $249 billion.
While the US and the UAE have a longstanding partnership focusing on defence and security, the emergence of AI has opened up a new avenue for collaboration. Energy and technology are now dominating the conversations surrounding potential partnerships. According to the UAE-based sovereign wealth fund, this partnership will help meet the growing power demands of data centres, hyperscale cloud companies and similar energy-intensive industries.
ADQ Chief Executive Mohamed Alsuwaidi said that the wealth fund was in a position to fulfil these infrastructural requirements and this deal with the ECP provides an opportunity to invest in generation and related infrastructure assets that support the growing power demand.
During his state visit to the US, Sheikh Tahnoon bin Zayed and Trump discussed the possible spaces for strengthened ties between the two countries, like AI and infrastructure. The US is vying to maintain its top spot as the global hegemon of AI technology, and the UAE wants more access to advanced microchips and computing skills, which it can receive from Washington.
In its ambitions to become a regional AI leader, the Emirates has set its eyes on buying microchips from companies including Nvidia Corp. However, these dreams are yet to materialise as the US government has instated restrictions on exports of advanced chips since the Biden administration.
According to Bloomberg News, ECP wants to increase investments in electricity and sustainability infrastructure and has already acquired large investments in the US. To this effect, Hamad Al Hammadi, ADQ’s deputy group chief executive officer has assured that the enterprise is comfortable with increasing the capital, should the need arise. He further explained that the full $25 billion capital will be invested over the next five years and the funding will be increased if new targets are identified.
This deal comes as a major success for President Trump who is directing all companies to either invest, manufacture and build in the US, or face tariffs. Aside from this joint venture, other Emirati companies have also expressed interest in building data centres in the US and improving cooperation in technology and artificial intelligence initiatives.
Al Hammadi said that the ADQ-ECP project will sign its first deals within a year of starting up, and the two partners will focus on developing power plants fired by natural gas. This project could involve the use of carbon capturing to reduce environmental costs. While no further details were disclosed, Al Hammadi did add that the development of power projects in line with customers’ demands was in the works, as it would not only meet the growing electricity demands but also reduce carbon emissions.
In conclusion, the US and UAE share a mutual interest in expanding their respective AI and energy capabilities, and with Trump in the Oval Office, such joint ventures will remain on the rise in the forthcoming years.
