THIS MORNING: UAE, Iran signal turning a new leaf in bilateral relations + is Abu Dhabi rethinking its 5 GW data center campus?

Good morning, everyone, and happy Monday. It’s a mostly good-news type of morning, with signs that the UAE and Iran are getting closer to restoring ties, though a key meeting on Iran’s Strait of Hormuz plan has been postponed.

The UAE’s EUR 40 bn Germany pledge is taking shape, with Adnoc, XRG, and Masdar signing agreements that could unlock more than EUR 5 bn in gas, chemicals, offshore wind, and battery storage investment.

Meanwhile, we spoke with head of Mashreq Private Bank Vipul Kapur to discuss what is set to be the bank’s strongest performance in five years, after it expanded its team by 30% despite earlier concerns about HNWI outflows. Kapur tells us the UAE’s wealth infrastructure isn’t the kind of thing that gets reversed by short-term turbulence. More on that below.

However, the long-term fallout from the war is harder to ignore. The UAE is reportedly reconsidering its flagship 5-GW AI data center campus, weighing a more dispersed network of facilities — plus air defenses and underground sites — after the war exposed the risks of concentrating critical digital infrastructure in one place. Al Maktoum International Airport is also getting a design rethink to help protect it against possible attacks.

The EnterpriseAM Egypt Forum is less than a month away — and here's some of what’s shaping up on the agenda:

• Where AI fits on the list of topics keeping CEOs awake at night
• What AI means for your company, your team, your job, and your family
• What's the AI opportunity for Egypt
• Building the AI infrastructure

And more panels to come.

Join us on 5 October in Cairo. Attendance is by invitation only, and seats are filling up quickly.

Request your invitation here.

A UAE-Iran detente?

A UAE-Iran discussion on the sidelines of the Brics summit could be the biggest sign yet of a possible restoration of ties between the countries. Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan met with Iran’s President Masoud Pezeshkian during the summit, according to state news agency Wam. The two discussed efforts to ease regional instability and tensions and promote de-escalation, the state news agency said. The move marks a rare meeting between officials from the two countries since the war began.

Another positive sign came from Anwar Gargash, diplomatic adviser to the UAE president, who noted in an X post that Pezeshkian had expressed “balanced and rational positions during the protracted crisis.” The UAE and Iran were also among those inking a joint statement calling for de-escalation in the regional war, Reuters reports.

And from Iran’s president himself: Pezeshkian said the two countries wanted to “turn the page on the past and look to the future,” BBC Arabic reports.

The stances would suggest a warming of ties between the UAE and Iran, after the Emirates severed trade and financial ties with Iran just last month, following the first direct attack on UAE territory in months — something that Tehran has denied involvement in.

Where things stand: This comes as a regional meeting set to take place in Salalah today — where Iran was set to update GCC countries on an agreement to allow more traffic through the strait — has been postponed. That said, Iran has stopped short of suggesting a full reopening and is also looking to retain control over who can actually pass through, Bloomberg reports. Hormuz became all the more important over the weekend after a Houthi strike on Saudi Arabia’s East-West oil pipeline temporarily shut down what was a key export lifeline for the Kingdom amid the Hormuz disruption.

Distributing the risk

The UAE is weighing replacing its planned 5 GW Abu Dhabi AI mega-campus with a network of data centers spread across the country after the Iran war exposed new infrastructure risks, Reuters reports, citing sources it says are familiar with the matter. Authorities are also considering ways to better defend the facilities, including through air defenses and underground facilities. G42’s line? “The project's specifics are subject to continuous review in line with the security, resilience, and operational standards expected of critical infrastructure at this scale” — and the group insists — construction is proceeding as planned.

REFRESHER- The 5 GW UAE-US AI Campus was unveiled during US President Donald Trump’s May 2025 visit to the UAE as the centerpiece of a USD 200 bn bilateral investment package and was set to become the largest data center complex outside the US. G42 is leading the build, with the first USD 30 bn, 1 GW Stargate UAE cluster being developed with US tech partners.

What changes — and what doesn’t: The first 1 GW Stargate UAE phase is still expected to proceed at its existing site, with its first 200 MW due online this year. The bigger shift is in the remaining 4 GW, which would likely be spread across multiple locations and built with tougher security measures. Reuters could not determine whether the redesign would change the overall cost or timeline.

The rethink has been building: We flagged in March that strikes on regional data centers during the peak of the Iran conflict earlier this year exposed the risks of concentrating critical digital infrastructure. Iran later explicitly identified Stargate UAE as a potential target, while two AWS data centers in the UAE were damaged in March attacks.

Bunker mentality

Dubai is redesigning DWC for the missile age: Al Maktoum International Airport (DWC) could bury fuel tanks underground and reinforce other infrastructure against drone and missile strikes, Dubai Airports CEO Paul Griffiths told the Financial Times. “Certain bits of the infrastructure may need to be a bit hardened against possible future activity, to make them more resilient,” he said, adding that Dubai Airports’ long-term strategy and timeline for expanding the airport remains unaffected.

Dubai now knows exactly what an airport under attack needs to do: Dubai International Airport fielded 111 alerts of ballistic activity during the war, but only 17 became actual strikes. Real-time coordination with the UAE military let the airport shift passengers to underground locations at short notice, with as little as 10 minutes between an alert and the all-clear. One of those 17 strikes hit above-ground fuel tanks, briefly halting operations before flights resumed within about an hour.

ICYMI- More than AED 55 bn of contracts for Al Maktoum International are due to be awarded this year, with the first phase of commercial operations slated for 2032. At full buildout, the USD 35 bn airport is designed to handle more than 260 mn passengers and 12 mn tons of cargo annually.

Germany pushes UAE-EU trade talks forward

Germany is backing a faster conclusion to the UAE-EU Comprehensive Economic Partnership Agreement (CEPA) talks. Foreign Trade Minister Thani Al Zeyoudi and German Economy Minister Katherina Reiche signed a joint declaration calling on negotiators to narrow the remaining gaps and reach an agreement quickly, state news agency Wam reports. The push comes as ties deepen: The UAE pledged EUR 40 bn (USD 46.5 bn) of investment into Germany just days earlier, targeting industry, AI, digital infrastructure, and energy.

IN CONTEXT- The EU agreement has been one of the slower-moving pieces of the UAE’s CEPA push, with Al Zeyoudi saying in July that talks were progressing more slowly than expected. The talks also go beyond tariffs, spanning services, investment, digital trade, energy, procurement, and sustainable development.

The UAE is also pushing on the UK front: A GCC-UK trade agreement is awaiting signature, while Abu Dhabi and London have already begun discussing a possible bilateral UAE-UK CEPA.

PSA

WEATHER- Temperatures will be hitting 41°C in Dubai today, before cooling to 31°C overnight, according to our favorite weather app. In Abu Dhabi, the mercury is reaching 42°C with lows of 30°C overnight.

Happening today

King Abdullah of Jordan arrived in the UAE yesterday, according to state news agency Wam. He met with President Mohamed bin Zayed Al Nahyan during a visit in Abu Dhabi and was joined by Jordan’s Prime Minister Jafar Hassan, Crown Prince Al Hussein, and other senior officials.

The big story abroad

US President Donald Trump has downplayed AI safety fears after tech CEOs voiced concern about the risk of rapid AI development. Trump emphasized the need to maintain Washington’s technological edge over Beijing. Last week, Anthropic researcher Jacob Coxon resigned from his position and warned that top developers believe AI poses a near-term existential threat.

Claude-maker to stay in the black: Anthropic reportedly told investors that it will sustain its profitability this quarter, addressing worries about the heavy spending of frontier AI firms prior to its major IPO. The company — which chose Nasdaq for its anticipated listing — has reportedly achieved gross profit margins exceeding 80% before accounting for distribution partner revenue shares and model training expenses.

A stalemate in Stockholm: Early results show Sweden’s election is in a deadlock between left-wing opposition and the right-wing governing coalition. Public broadcasting reports the opposition holds a lead of just 20k votes. The margin sets the stage for weeks of political uncertainty and intense coalition talks in the Nordic region’s largest economy.

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