TSMC has reportedly held multiple meetings in recent months with Steve Witkoff, the U.S. special envoy to the Middle East, and representatives of MGX Fund Management, a UAE-based investment firm backing the proposal, Bloomberg reported.
The talks come amid a surge of high-level U.S. interest in the region's emerging technology ecosystem.
A recent tour of the Middle East led by former President Donald J. Trump included several of Silicon Valley’s most prominent figures, among them Elon Musk of Tesla, Jensen Huang of Nvidia, Sam Altman of OpenAI, and Lisa Su of AMD. Their presence has helped spark a wave of AI- and data center-related investment announcements across the Gulf.
The proposed chip foundry, if realized, would mark a milestone for the UAE and the broader region. It would also represent a significant expansion for TSMC beyond its traditional bases in Asia and recent projects in the United States and Japan. However, the project faces steep challenges — including limited local access to water, a critical resource for chip fabrication, and a shortage of specialized technical talent.
Still, the vision is part of a broader, region-wide effort to reduce economic dependence on hydrocarbons by investing in advanced technologies. Both Saudi Arabia and the UAE have launched sweeping initiatives — Vision 2030 and the National AI Strategy 2031, respectively — aimed at cultivating domestic AI capabilities and attracting global tech leaders.
In parallel with the TSMC talks, the UAE is pressing ahead with the Stargate UAE initiative, a joint venture with OpenAI, Nvidia, Oracle, and SoftBank to construct a 5-gigawatt AI data center in Abu Dhabi. When complete, the facility is expected to consume roughly as much electricity as three million average American homes.
Saudi Arabia, for its part, has tasked the sovereign wealth fund–backed startup Humain with acquiring 18,000 of Nvidia’s cutting-edge Blackwell chips and forming a $10 billion strategic partnership with AMD. These moves underscore the region’s intent to leapfrog into the upper ranks of AI infrastructure development.
reporter
Kim Dong-young
davekim0807@ajupress.com
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