To add details and background

By Alexander Cornwell

ABU DHABI, June 6 (Reuters) - A multibillion-dollar deal to build one of the world's largest data centers in the United Arab Emirates using U.S. technology remains elusive due to security concerns, sources familiar with the matter told Reuters.

The United States and the UAE announced the massive artificial intelligence complex project, which is set to include a cluster of powerful data centers , during US President Donald Trump's two-day visit to Abu Dhabi last month.

G42, a state-linked Emirati technology company leading the development of the AI industry, will finance the planned 26-square-kilometer site.

Tech giants NVIDIA, OpenAI, Cisco, and Oracle, along with Japan's SoftBank, are working with G42 to build the first phase of the project, known as Stargate Emirates, which is scheduled to begin operations in 2026.

Trump administration officials have touted the project, which is set to use advanced AI chips from Nvidia, as a success in guiding Gulf states toward American technology rather than Chinese technology.

But five sources familiar with the project said that US officials have not yet determined the security conditions for exporting the advanced chips or how the agreement with the Gulf state will be implemented.

During Trump's visit, Abu Dhabi pledged to amend its national security regulations to comply with Washington's requirements, including safeguards against the transfer of US-origin technology.

But four of the sources said that US officials remain cautious about the close relationship between the UAE and China, noting that the concerns are consistent with those raised during the administration of former President Joe Biden and Trump's first term, particularly regarding the Gulf state's reliability as a strategic partner.

None of the sources indicated whether there were any new indications, but they said that existing concerns had not yet been addressed. During Trump's first term, the UAE and other Gulf states moved forward with the deployment of Huawei's 5G technology despite US objections.

Four of the sources said that other Trump administration officials also question whether the UAE, despite its intentions, has the ability to prevent US technology from reaching Washington's adversaries.

A White House spokesman referred a Reuters request for comment to the Commerce Department, which has not yet responded.

The UAE government also did not respond to a request for comment.

Four of the sources said the US administration has no clear timeline for completing the deal. Abu Dhabi will have to accept yet-to-be-specified US regulations on the technology, but it may also request modifications that could delay final approval, according to two sources.

Two sources said the US controls would likely ban the use of Chinese technology and place restrictions on the employment of Chinese workers at the site, which is being referred to as an "AI campus."

Four sources confirmed that the US administration remains committed to concluding the deal, but noted opposition among both Republicans and Democrats due to concerns about the UAE's relationship with China.

The Emirates Stargate project is scheduled to begin operations next year, with an estimated 100,000 advanced NVIDIA chips. The 1-gigawatt project will use NVIDIA's Grace Blackwell GP-300 system, currently the company's most advanced AI server.

The UAE is an influential player in the Middle East and is known for its strategic hedging policy, which has led to close ties with China and Russia.

Under pressure from the Biden administration last year, G42 divested Chinese equipment and sold investments in China.

In return, the company gained broader access to advanced American technology, while Microsoft acquired a $1.5 billion stake in G42.

However, Chinese companies Huawei and Alibaba Cloud remain active in the Gulf state, and an organized network has been tracked down smuggling AI chips into China from countries including the UAE.

The UAE has also become a hub for companies evading sanctions imposed on Russia since 2022 due to the war in Ukraine.

The Trump administration said that American companies will manage the data centers that the UAE will build and provide "American-led" cloud services across the region.

The Abu Dhabi AI Campus is expected to eventually host five gigawatts of data centers.

(Prepared by Abdel Hamid Makkawi for the Arabic edition - Edited by Mohamed Attia)