UAE’s $1.4trn US pledge is political positioning, experts say

• Equivalent to quarter of UAE GDP 
• Signal of UAE’s global partner choice
• ‘Music to Trump’s ears’, says observer

The UAE’s pledge to invest $1.4 trillion in the US over the next 10 years is about political positioning rather than exact numbers, according to experts.

The country committed to a 10-year $1.4 trillion investment in AI infrastructure, semiconductors, energy and American manufacturing during a meeting in Washington last week, according to a White House announcement.

But investing $140 billion a year over the next decade is equivalent to more than a quarter of the UAE’s $514 billion GDP and “not viable”, according to Neil Quilliam, a fellow in the Middle East and North Africa programme at Chatham House in London.

In 2023, the stock of foreign direct investment (FDI) in the US from Middle East sources totalled only $50 billion, according to the US Bureau of Economic Analysis.

Meanwhile about 72 percent of overseas investment by UAE sovereign wealth funds is in the form of portfolio holdings rather than FDI. The largest fund, the Abu Dhabi Investment Authority, has just over half of its holdings in the US, worth roughly half a trillion dollars.

For Quilliam, the $1.4 trillion announcement is less about exact numbers than signalling intent.

“The pledge gives a crystal clear signal that the UAE views the US as its strategic partner of choice, over China, Russia, and India,” he said. What matters is that “Abu Dhabi moves quickly and convinces President Trump that the US is benefitting substantially from the partnership”.

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Experts believe a similar pledge by Saudi Arabia to invest $600 billion in the US economy over four years, despite it having a significantly larger economy com pared to the UAE, is also unlikely to be achieved.

That would equate to an average of $150 billion in annual trade and investment or 14 percent of GDP, a former IMF official told AGBI last month.

The UAE pledge is “a clear signal that technology is the cornerstone of the bilateral relationship between Abu Dhabi and Washington,” said Mohammed Soliman, manager for the Middle East and North Africa at US advisory firm McLarty Associates.

Soliman said he saw the $1.4 trillion pledge as “ambitious yet viable” with public and private funds, though success hinges on “seamless execution”.

The US must find a balance between its expanding technological partnership with the UAE and tightening its export control regime aimed at protecting national security, Soliman said.

Whether or not the investments are delivered, “the mere mention of the UAE’s $1.4 trillion investment pledge in the Oval Office was music to the president’s ears”, Chatham House’s Quilliam said.