Canada, UAE Ink Non-Binding AI Investment Pact

Published Date : 14/10/2025 

Canada and the United Arab Emirates have signed a non-binding memorandum of understanding to explore investment opportunities in artificial intelligence, particularly focusing on data centre infrastructure. 

Canada and the United Arab Emirates (UAE) have taken a significant step forward in their collaboration by signing a non-binding memorandum of understanding (MoU) to explore investment opportunities in artificial intelligence (AI). The MoU was signed on Tuesday in Abu Dhabi by Federal AI Minister Evan Solomon and the UAE’s Minister of Investment, Mohamed Hassan Alsuwaidi.

The primary goal of this agreement is to foster mutual investment, with an emphasis on building data centres in Canada. “The framework is to make sure that we get more Canadian companies opening offices here, but also to make sure that the UAE invests in Canada on an infrastructure level,” said Minister Solomon in an interview.

This move comes as Canada seeks to diversify its trade relationships, particularly in light of the tense relations with the United States. The courting of the UAE has been ongoing for several months, with Minister Solomon meeting a delegation from the UAE in Ottawa in June. Additionally, representatives from the UAE were prominently featured at the All In conference, a major AI event held in Montreal last month.

The UAE has emerged as a significant player in the AI sector, appointing its first minister of AI in 2017. The country’s sovereign wealth funds, including Mubadala and ADQ, have billions of dollars allocated for investments in AI infrastructure. OpenAI, a leading AI company, has partnered with Emirati cloud company G42 to build a data centre in Abu Dhabi, which is set to go live next year. G42 has also announced plans to establish a subsidiary in London to work with the public and private sectors in Europe.

Meanwhile, Emirati fund MGX partnered with Nvidia Corp. in May to build what they claim to be Europe’s largest data centre campus in France. Italian Prime Minister Giorgia Meloni announced this year that the UAE will invest US$40 billion in Italy, including for AI, data centres, renewable energy, and rare earths.

Minister Solomon highlighted the interest of MGX, G42, and other sovereign wealth funds in making investments in Canada or co-investing with other entities. “They’re interested in partnering with a country that’s got incredible access to energy, and they see this as a stable, trustworthy, and well-positioned country,” he said. (Minister Alsuwaidi, who signed the MoU, is also the CEO of ADQ.)

However, these investments come with increased political influence for the UAE. U.S. officials have raised security concerns with G42, particularly regarding the potential transfer of American technology and data to China due to the UAE’s ties with the country. “We’re aware of all those questions and all those issues. Our eyes are wide open,” Minister Solomon stated.

Some Canadian companies are already making inroads in the region. Toronto-based AI company Cohere is working with STC Group, a telecommunications company in Saudi Arabia. Venture investment firm Inovia Capital recently co-led a delegation of tech executives to Abu Dhabi and Dubai, including Cohere co-founder Nick Frosst.

Beyond AI, the UAE is also looking at investments in other sectors such as life sciences, agriculture, and fintech. Minister Solomon emphasized that these areas present additional opportunities for collaboration and mutual benefit between Canada and the UAE. 

Frequently Asked Questions (FAQS): 

Q: What is the primary goal of the non-binding memorandum of understanding between Canada and the UAE?

A: The primary goal is to foster mutual investment, particularly in the development of data centres and other AI-related infrastructure.

Q: Which companies and funds are involved in the AI investments between Canada and the UAE?

A: Companies and funds like OpenAI, G42, MGX, Mubadala, and ADQ are involved in the AI investments between Canada and the UAE.

Q: What concerns have been raised about the UAE's AI investments?

A: Security concerns have been raised, particularly regarding the potential transfer of American technology and data to China due to the UAE’s ties with the country.

Q: What other sectors are the UAE interested in investing in beyond AI?

A: The UAE is also interested in investing in life sciences, agriculture, and fintech sectors.

Q: How does this agreement fit into Canada's broader trade strategy?

A: This agreement is part of Canada's strategy to diversify its trade relationships and reduce dependency on the United States, especially in light of the tense relations between the two countries. 

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