The recent artificial intelligence ( AI ) agreement between the United States and the United Arab Emirates, which paves the way for the UAE to establish one of the world’s largest data campuses, has sparked heated debate in the US. The New York Times questioned whether President Donald Trump was “trading away America’s tech future”, while Bloomberg warned that “offshoring AI to the Middle East could hand China a win.”

At the centre of the deal is a commitment to sell the UAE 500,000 of Nvidia’s most advanced semiconductors per year ( for comparison, 200,000 chips reportedly are used to power Elon Musk’s Colossus, believed to be the world’s largest AI supercomputer ). This is a clear win for the UAE, which aims to position itself as a tech leader. But the agreement also highlights a profound shift in global power dynamics: technological sovereignty is no longer a choice; it has become a strategic imperative.

The economic and geopolitical implications could be far-reaching. As countries compete for dominance in AI, semiconductors, and cloud infrastructure, the real challenge is to achieve technological autonomy without resorting to protectionist policies. That requires striking a delicate balance between international cooperation and addressing national security risks.

The UAE’s push for AI leadership is a prime example. To become a tech powerhouse, it needs to foster homegrown innovation while navigating an increasingly interdependent digital landscape.

As the race for technological supremacy intensifies, tech sovereignty has become a top priority for governments around the world. The ability to design, build, and maintain critical systems and production capacity independently is now essential to both economic competitiveness and national security, especially as global supply chains realign.

At its core, technological and manufacturing sovereignty is about maintaining control over the foundational tech stacks that underpin modern economies, from semiconductors to 5G networks. Relying on foreign chipmakers or cloud services can lead to delays, shortages and strategic vulnerabilities. Consequently, economic competitiveness increasingly hinges on the strength of domestic innovation. For developing countries, in particular, bolstering local capacity is a prerequisite for job creation, value generation and long-term resilience.

The global economic shocks of the past few years, especially Russia’s invasion of Ukraine and pandemic-related semiconductor shortages, have underscored the link between national security and technological independence. To shield key sectors like defence, energy, finance and health from foreign influence, governments require secure communication networks, uncompromised defence systems and AI solutions based on reliable data.

In the digital age, sovereignty also means protecting citizens’ privacy. Control over data governance, encryption and storage infrastructure is crucial to avoid exposure to foreign surveillance or legislation that undermines national privacy protections and civil liberties.

But tech stacks are not just a combination of hardware and software. They are socio-technical ecosystems that comprise human capital, research institutions, supply chains, intellectual property frameworks and the broader policy environment. Achieving technological sovereignty, therefore, requires more than building a fabrication plant or hosting data on a local server. It calls for government, academia, and industry to work together to advance shared objectives.

Governments, in particular, have an important role to play in setting strategic priorities, funding research, regulating platforms and levelling the playing field for domestic innovators. In addition to investments in education, research and development, and industrial policy, public procurement can help unlock new opportunities for local tech providers.

To be sure, innovation cannot be commercialized or scaled without the private sector. From chipmakers to AI start-ups, industry actors need clear incentives, supportive policy frameworks and a stable investment climate to grow. Public-private partnerships can help mitigate risks, bridge knowledge gaps and accelerate the development of frontier technologies.

Meanwhile, universities and research labs must continue to serve as talent incubators of innovation engines. By fostering collaboration between academic institutions and private companies, policymakers can ensure a steady flow of skilled professionals and promising ideas into the broader economy.

In its efforts to build a thriving innovation ecosystem, then, the UAE must look beyond capital investments in physical infrastructure. Its success will depend on strengthening ties between academic institutions and the private sector while continuously refining its policy frameworks to attract and retain a diverse, highly skilled workforce.

But the quest for tech sovereignty must not veer into digital protectionism. Instead of chasing an unrealistic vision of total self-sufficiency, policymakers should pursue strategic autonomy by setting national tech policies while remaining open to international cooperation.

The European Union offers a useful model. Dozens of European tech companies and organizations have expressed support for the EuroStack initiative, which aims to reduce dependence on foreign infrastructure by developing competitive domestic alternatives in cloud computing, AI and software. At the same time, the EU aims to curb US firms’ market power by enforcing the Digital Markets Act, despite pushback from Big Tech.

Although the US-UAE agreement has attracted significant media attention, little is known about its approach to national security concerns and geopolitical risks. How these issues are addressed will determine whether the UAE’s AI campus becomes a model for strategic international collaboration or a cautionary tale about the dangers of overlooking digital security.

The obstacles to achieving tech sovereignty are significant and multifaceted. The high costs of semiconductor production, the complexity of global supply chains and the market dominance of major tech firms make it difficult for any single country to secure full sovereignty without trusted international partnerships.

Given this reality, policymakers must integrate sovereignty considerations into trade agreements and data-sharing frameworks. The deepening US-UAE tech partnership, the EU’s efforts to balance regulation with competitiveness and the formidable barriers to semiconductor self-sufficiency all show that strategic collaboration remains vital even in a volatile geopolitical landscape.

At stake is not just who develops the fastest chips and most powerful algorithms, but who writes the rules that govern the digital world. This kind of influence depends on more than technological prowess; it requires balancing national security with economic openness. The countries that manage to enhance domestic resilience while forming international partnerships will be the ones driving global innovation for years to come.

Nii Simmonds is a visiting fellow at New America’s Planetary Politics Initiative.

Copyright: Project Syndicate