Nvidia’s chips are driving the United Arab Emirates’ rise as an artificial-intelligence power. Next on offer is free software, a model built to rival China’s best.
Last month, Nvidia spent $7 billion to buy a stake in U.S. coding startup Poolside and license the tools it uses to build AI models. The new model is due by the end of the year for anyone to download for free, and it is aimed at buyers already running Nvidia hardware, Marc Einstein, an analyst at Counterpoint Research, told Rest of World. Few countries fit that description better than the UAE, whose flagship data center will run on 400,000 Nvidia chips.
For years the UAE positioned itself as neutral ground between the U.S. and China, buying chips from the former and, until recently, equipment from the latter. It built its own free model, Falcon, to avoid relying on imported software. That neutrality has been fading since G42, the state-backed AI company, cut its Chinese ties to win Nvidia’s chips. It would narrow further if the country also opts for the new model.
“The last missing piece was the model layer,” Mohammed Soliman, a senior fellow at the Middle East Institute, a foreign-policy think tank in Washington, told Rest of World. “Nvidia already owns the chips. Now it is scaling the factory that produces the models that run on those chips, and it is releasing them as open weights.”
Build or rent?
The two institutions leading the UAE’s AI push each have their own view on whether to build sovereign AI models from scratch or lean on existing technology from other companies.
The Technology Innovation Institute, the government lab behind Falcon, insists on building its own models from the ground up, while G42, which runs the UAE’s AI infrastructure, has aligned itself with Nvidia’s push for free models.
“As a model-building lab, we believe that maintaining diversity in AI perspectives, and preserving full technological sovereignty, requires a strong, homegrown foundation,” Hakim Hacid, TII’s chief researcher, told Rest of World. “The value is not limited to the models we ultimately produce, but it lies in mastering the underlying technology and retaining control across the entire AI stack.”
G42 did not answer Rest of World’s questions about whether it would use Nvidia’s model. The company has been an early supporter of Nvidia’s push to give away powerful models. In July, Nvidia formed an alliance around the argument that countries need AI models they can inspect and control, and G42 joined immediately, becoming the only Gulf company to do so.
“Frontier open models are an essential part of that future, alongside frontier closed models, with security, trust and sovereign control designed in from the start rather than bolted on later,” G42’s CEO, Peng Xiao, wrote on X at the time.
Building on someone else’s model need not mean giving up control, Soliman said. Sovereignty in AI is a matter of degree rather than an all-or-nothing choice, he said.
“Sovereignty was never about inventing the foundational model from scratch,” Soliman said. “It is about the model’s weights, how you fine-tune the data, and, most importantly at this stage, your ability to serve these models to users in the UAE and other markets.”
The U.S. government approved sales of Nvidia’s most advanced chips to the UAE after G42 sold its stakes in Chinese technology companies two years ago. In July, it placed the UAE in the group of countries it treats as its closest technology allies. The software running on those chips is mostly rented from U.S. companies, which decide what the models may do and who may use them.
Falcon was meant to be the exception. TII built it in 2023 as a free alternative to models from the U.S. and China, and it ranked first this year on Counterpoint’s index of state-backed models.
Saudi Arabia, which is competing with the UAE to become the region’s AI hub, has taken a different route. Humain, the state AI company, is cleared to buy tens of thousands of Nvidia chips, and introduced an Arabic model this month that it had commissioned from a Chinese lab. A year earlier, it had launched one it said was built from scratch in the kingdom.
“It shows there’s little full-stack lock-in: The Saudis are using Chinese AI models to build their own models, while using U.S. chips to develop and run them,” Sam Winter-Levy, a senior fellow at the think tank Carnegie Endowment for International Peace, told Rest of World. “These states have strong incentives to hedge and will continue to do so for as long as they can.”
Nvidia’s Nemotron
Nvidia has its own reasons for wanting countries to take the upcoming model, expected to be called Nemotron 4.
Earlier versions of U.S. AI models have lagged well behind China’s free models, which were downloaded roughly 2 billion times this year, far ahead of any Western rival, according to an August report by Hugging Face, the platform where developers share and download AI models.
To change that, Nvidia has also agreed to pay almost $13 billion to buy Hugging Face. Governments building their own models mostly start from a free one made by Meta or Alibaba, and Nvidia’s spending is meant to make Nemotron the base they pick instead, Einstein said.
The Poolside deal “appears less about displacing incumbent model families and more about increasing future adoption of Nemotron within an ecosystem where Nvidia already has a strong hardware position,” Einstein said.
TII says it can do both. While the foundation stays Emirati, anything better from elsewhere can still be put to work, Hacid said.
“Sovereignty does not mean isolation,” he said. “We build our foundation at home, while remaining open to the best of the world.”
Additional reporting by Divsha Bhat in Dubai.
Facts Only
* Nvidia spent $7 billion to buy a stake in Poolside and license AI model-building tools last month.
* A new free model based on this technology is slated for download by the end of the year.
* The target audience for the new model is for buyers already using Nvidia hardware.
* The UAE plans to run its flagship data center on 400,000 Nvidia chips.
* The UAE previously positioned itself as neutral between the U.S. and China.
* The UAE developed its own free model, Falcon, to avoid relying on imported software.
* G42 cut ties with China to obtain Nvidia chips.
* Mohammed Soliman stated that Nvidia now owns the chips and is scaling the factory producing models for them as open weights.
* The Technology Innovation Institute (TII) insists on building its own models from scratch to maintain technological sovereignty.
* G42 has aligned itself with Nvidia's push for free models, joining an alliance where countries seek inspectable and controllable AI models.
* Saudi Arabia is using Chinese AI models to build its own models while using U.S. chips for development.
Executive Summary
Nvidia’s AI chips are fueling the United Arab Emirates' emergence as an artificial-intelligence power, with the country planning to adopt a free software model designed to compete with China's technology. Nvidia spent $7 billion to acquire a stake in the U.S. coding startup Poolside and license its AI model-building tools. This new free model is scheduled for public release by year-end and targets entities running Nvidia hardware, such as the UAE, which plans to deploy 400,000 Nvidia chips in its flagship data center.
The UAE has historically sought neutrality between the U.S. and China, previously acquiring chips from the former and equipment from the latter while developing its own free model, Falcon. This neutrality is evolving as G42, a state-backed AI company, severed ties with China to secure Nvidia chips. A key element missing for the UAE was the model layer, which Nvidia now seeks to provide by releasing open weights.
The two main entities driving the UAE’s AI strategy—the Technology Innovation Institute (TII), responsible for Falcon, and G42, which manages infrastructure—have differing approaches. TII advocates for building sovereign models from the ground up to ensure technological sovereignty, while G42 has aligned with Nvidia's push for free models. This dynamic suggests that while foundational sovereignty is prioritized by some, practical adoption may lean toward leveraging existing, powerful technologies.
Full Take
The narrative pivots on the tension between technological sovereignty—defined as controlling the entire AI stack, from hardware to weights—and the practical imperative of adoption. The shift is from achieving isolation through proprietary software (Falcon) to navigating an ecosystem where foundational models are distributed and controlled by hardware providers like Nvidia, creating a new locus of control at the model layer. The UAE’s strategic pivot demonstrates that sovereignty is not an all-or-nothing choice; it can manifest as mastery over the application and fine-tuning of externally provided systems rather than pure invention from scratch.
The differing stances between TII (advocating for homegrown foundations) and G42 (aligning with Nvidia's open framework) illustrate a critical structural choice: whether sovereignty resides in the foundational architecture or the operational deployment layer. The fact that states like Saudi Arabia are successfully hedging by combining Chinese models with U.S. hardware suggests that systemic constraints—the availability of chips and the openness of model weights—create powerful, independent incentives for state actors to pursue polycentric strategies.
The push toward Nemotron highlights an implicit acknowledgment that competitive advantage in AI is increasingly defined by ecosystem integration rather than pure isolation. Nvidia’s strategy of providing a strong hardware base incentivizes the adoption of its models, suggesting that full sovereignty may be less about inventing *a* model and more about controlling the access points (weights, data pipelines) to the most powerful computational substrate. The challenge for sovereign entities is ensuring that leveraging external advancements does not inadvertently subordinate control over future development pathways, demanding continuous scrutiny of who dictates the terms of "sovereignty" in the context of open weights and hardware dependency.