Strategy and Diplomacy
What we are tracking
The Financial Times published the third instalment of a five-part series on the UAE this week, examining how Abu Dhabi built its relationship with Washington. The piece traces the arc from 2006, when congressional opposition forced DP World to abandon its purchase of six US seaports, to the present, where the UAE is described by US politicians and military commanders as one of America’s most capable regional allies. The FT covers the recent US decision to authorise advanced chip sales and remove related export controls, which Otaiba described as a milestone built on sustained engagement. The FT notes that some Democratic lawmakers have criticised the chips decision, citing reported investments by entities linked to Sheikh Tahnoon bin Zayed in the Trump family’s World Liberty Financial. The UAE says those investments were private business decisions unconnected to political objectives or the chips agreement, and MGX has said it paid no fees to WLFI or its affiliates. The piece also references longstanding allegations regarding UAE support for the Rapid Support Forces in Sudan, which the UAE denies, and the country’s role as a jurisdiction in Iran-related sanctions activity.
Why it matters
The Financial Times argues that UAE’s Washington position was built over two decades through consistent presence, institutional relationship-building, and alignment with US strategic priorities at moments that mattered, not through any single intervention. The article also documents the scrutiny that accompanies that position as it deepens, with several sources arguing the relationship has become asymmetric. That tension, between influence and the attention influence attracts, is the thread running through the whole series and is likely to shape how the UAE is discussed in Washington through the November midterms.
What to watch
Whether the remaining instalments of the FT series generate a wider response in Washington; how the UAE and its representatives engage with the reporting publicly; and whether the outcome of the November midterms changes the congressional posture toward US-UAE technology and defence cooperation.
Geopolitics and Security
What we are tracking
Saudi Arabia, Turkey, and Pakistan signed the Mecca Joint Defence Agreement on August 7, a trilateral mutual defence pact committing each state to treat an armed attack on any one of them as an attack on all three. The agreement was signed at Al-Safa Palace by Crown Prince Mohammed bin Salman, President Recep Tayyip Erdogan, and Prime Minister Shehbaz Sharif, following nearly a year of negotiations. It builds on the bilateral Strategic Mutual Defence Agreement concluded between Riyadh and Islamabad in September 2025, extending a comparable commitment to Ankara. The pact brings together Turkey, which fields NATO’s second-largest standing army, Pakistan, the only Muslim-majority nuclear-armed state, and Saudi Arabia, the world’s largest oil exporter and custodian of Islam’s two holiest sites. It was signed against the backdrop of the ongoing Iran war and renewed fighting between Saudi Arabia and the Houthis in Yemen.
Why it matters
This is the most significant realignment of regional security architecture in decades and the first time three of the largest military establishments in the Muslim world have been joined under a single defensive formula since the Baghdad Pact era. Signing in Mecca adds symbolic weight that extends well beyond the operational terms. For Riyadh, the pact provides deterrent depth at a moment when Iranian strikes and Houthi attacks have exposed the limits of relying on US security guarantees alone. Analysts have framed it as an inflection point in an emerging multipolar order, with implications for how Gulf states hedge their security relationships going forward.
What to watch
How the pact is operationalised in practice, particularly around joint exercises, defence-industrial cooperation, and intelligence sharing; whether other GCC states seek to join or negotiate parallel arrangements; and how Washington responds to a security framework among close partners that it is not party to.
Capital and Investment
What we are tracking
Mubadala Investment Company is considering an investment of up to ¥1 trillion, approximately $6.3 billion, to build a 500-megawatt AI data centre in Japan’s Akita Prefecture, Bloomberg reported on August 6. If completed, it would be the largest data centre in Japan. Total investment surrounding the project, including suppliers and adjacent operations, could reach ¥2 trillion. The project is being developed by US startup BitGrid alongside Japanese IT firm S2, with a consortium of Japanese companies likely handling construction. Mubadala’s involvement would come through MGX, the UAE’s dedicated AI investment vehicle, which completed its $40 billion acquisition of Aligned Data Centers in July alongside BlackRock’s Global Infrastructure Partners. Japan has designated Akita among several priority investment zones and is targeting ¥32.7 trillion in combined public and private data centre investment by fiscal 2035. The UAE Ambassador to Japan is expected to visit Akita later this month.
Why it matters
The Japan deal fits a clear pattern in Gulf capital deployment: moving from minority stakes in AI companies toward direct ownership of the physical infrastructure underneath them. It also reflects a deliberate geographic diversification. Japan is increasingly viewed by global investors as a stable market with comparatively low geopolitical risk, which is a meaningful consideration for Gulf funds whose home region is currently at war. For Abu Dhabi, building compute capacity across multiple jurisdictions is both a commercial strategy and a form of risk management.
What to watch
Whether the Mubadala investment is formalised and at what level; whether Japanese regulators and local stakeholders in Akita welcome sovereign Gulf capital at this scale; and whether other GCC funds follow into the Japanese and wider Asian compute market.
Energy and Profit
What we are tracking
ADNOC Gas reported second-quarter net income of $665 million on August 10, exceeding its guided range of $400 million to $600 million despite significant war-related disruption. Profit fell sharply from the record $1.38 billion recorded a year earlier, with revenue dropping more than 33% to $3.11 billion. Alongside the results, the company took final investment decisions and awarded $8.2 billion in EPC contracts for Phases 2 and 3 of its Rich Gas Development project, with $3.9 billion going to China’s Wison Engineering for a new processing train at Habshan and $4.3 billion for a natural gas liquids fractionation unit at Ruwais. ADNOC Gas now expects to invest around $28 billion between 2026 and 2030 and has raised its EBITDA growth target to 60% by 2030 against 2023 levels. Processing capacity at Habshan has been restored to 85%, ahead of schedule. The company’s CFO also confirmed it is studying new export routes to reduce reliance on the Strait of Hormuz, potentially including a new plant on the UAE’s east coast.
Why it matters
The results capture the central tension in the UAE’s energy position. Revenue has fallen by a third and exports remain constrained by the Hormuz disruption, yet the company is committing to its largest-ever capital programme. That is a deliberate signal of confidence in long-term gas demand and in the UAE’s ability to build around the chokepoint rather than wait for it to reopen. The east coast export study is the more strategically significant disclosure: it places ADNOC Gas alongside DP World and Gulftainer in the growing set of Emirati entities restructuring their infrastructure around a permanent Hormuz hedge. The move also follows the UAE’s OPEC exit, which the CFO characterised as favourable for the gas business.
What to watch
Whether the east coast export study progresses to a formal investment decision and on what timeline; whether Q3 guidance of $600 million to $800 million holds if maritime disruption persists; and whether ADNOC Gas can reach its full-year target of $3.5 billion to $4 billion, which assumes maritime operations are fully restored by the fourth quarter.
