UAE to Pursue $20 Billion 'Stargate' Project, Aiming to Become Middle East AI Hub

The United Arab Emirates (UAE) is accelerating its steps to leap forward as a core hub in the global AI infrastructure market based on its massive capital power. The UAE recently announced the promotion of the 'Stargate' project with MS, forecasting large-scale infrastructure construction with an initial investment exceeding $20 billion (approximately 27 trillion won).

The $20 Billion 'Stargate' Project... UAE Leaping Forward as a Data Hub

According to a KOTRA TV video, the UAE is implementing a national-level AI strategy to establish itself as a center for the global AI industry beyond being a simple energy powerhouse. The UAE is actively fostering the AI industry, having appointed the world's first AI minister in 2017. In particular, Dubai is playing the role of a gateway to the global market by actively creating infrastructure and an investment environment to attract global companies and startups. Lee Soo-min, a manager at KOTRA who appeared in the video, explained, "Dubai is serving as a gateway that is most open to the global market and is relatively more open compared to other regions such as Abu Dhabi."

The 'Stargate' project currently being pursued with MS is the pinnacle of this trend. An interviewee in the video explained, "As MS has strengths in cloud infrastructure, if they invest massive capital to build giant data centers, the UAE itself can become an AI factory and a data hub." In fact, the UAE is laying the groundwork for large-scale infrastructure construction, such as securing 500,000 NVIDIA GPUs annually.

This AI infrastructure construction is also showing visible results in the public service sector. The RTA is using AI to predict public transportation demand and design real-time optimal routes to reduce traffic congestion, and the global port company DP World is applying AI to real life and entire industries, such as increasing cargo handling efficiency using autonomous vehicles and robots. Han Hyeong-seop, CEO of HHS, emphasized, "Dubai and Arab nations are paying great attention to building AI infrastructure," adding, "Data-related startups or companies interested in AI should closely observe Dubai's investment direction and policies." He also predicted, "If large-scale data centers are built in the Middle East in the future, it could develop in a collaborative direction with South Korean companies."

Geopolitical Risks and 'Fake Business Cards'... Challenges for Companies Entering the Middle East

Despite being a market with high growth potential, there are not a few realistic difficulties faced by our companies wishing to enter the Middle East. The unstable situation in the Middle East region, such as recent air strike issues in the United States and Israel, is acting as a variable for companies' local activities. CEO Han Hyeong-seop mentioned, "It is indeed a burdensome situation to enter the Middle East immediately, as there are cases where people barely returned to South Korea from Saudi Arabia." However, he added, "If you have established partnerships in advance, you can continue to communicate through email, and you can even take advantage of the situation where local demand has increased."

Manager Lee Soo-min warned, "The Middle East is a market where constant geopolitical risks must be considered," and "Geopolitical conflicts directly affect not only energy prices but also logistics costs, local investment sentiment, and decision-making." Therefore, a strategic approach considering not only the growth potential of the Middle East market but also the risks is essential.

Due to the characteristics of Dubai, which has high market openness, points to be careful about were also mentioned. As the market is open, the risk of fraudulent transactions also exists. In the video, cases were pointed out where non-existent companies appeared at exhibition sites with fake business cards. Regarding this, KOTRA stated that when companies inquire, local trade center employees directly visit the sites to verify whether the company actually exists, providing practical verification support.

KOTRA Activates Support System from Discovering Potential Buyers to Emergency Grievance Consultation

KOTRA is operating multifaceted support programs for the stable entry of our companies into the Middle East. First, it provides a 'Potential Buyer Discovery Support Service' for companies entering the Middle East market for the first time. This is a program that helps verify the marketability of our products and technologies in advance through 1:1 matching with local buyers.

The operation of the 'KOTRA Pavilion' for companies participating in overseas exhibitions is also a major support measure. It was noted as an advantage that participating in the Korea Pavilion (KOTRA Pavilion) rather than operating a single booth provides a higher brand exposure effect and allows for help from KOTRA local staff in responding to local languages and unexpected situations. The video explained that KOTRA plays the role of a 'relief pitcher' regarding language problems or unexpected situations related to regulations occurring at exhibition sites. Regarding exhibition performance, CEO Han Hyeong-seop advised, "Rather than being discouraged if there is no performance on the first day, it is important to visit several times to see if customers visit repeatedly."

Emergency support measures are also prepared to respond to the recent instability of the situation. KOTRA is receiving grievances from companies through the 'Middle East Situation Emergency Response Grievance Consultation Desk' and supports ensuring that local marketing and networks are not interrupted through emergency vouchers. In particular, when logistics problems occur, it provides information on local logistics trends and supports solving logistics difficulties by collaborating with overseas joint logistics centers. Additionally, it helps companies respond agilely to local situations through the 'Export 24' service.