The UAE Plans to Invest Heavily to Reshape Its Defense Development Path

According to a report by Reference News Network on May 14, the French newspaper Le Figaro reported on May 7 that the UAE has long relied on the United States, France, or South Korea for security guarantees. Now, Abu Dhabi hopes to transition from a customer to a strategic investor. According to Bloomberg, Abu Dhabi is considering creating an investment tool focused on the defense sector, which can invest in foreign military enterprises, drone manufacturers, and specialized startups, while also strengthening its own military production capabilities. Although discussions are still in the early stages and may end without results, there is a grander goal behind this plan: to use Abu Dhabi's billions of dollars to reduce its dependence on external military forces.

The UAE has the capability to do this. According to Bloomberg, driven by oil wealth, the country's sovereign funds and public investment institutions currently manage nearly $2 trillion in assets. Recently, Abu Dhabi has demonstrated how to leverage this financial power in the field of artificial intelligence. In 2024, the UAE established the investment company MGX, which is involved in the U.S. "Stargate" project. This is an AI infrastructure initiative announced by the OpenAI Research Center, Oracle, and SoftBank, with a scale of $500 billion. MGX is also collaborating with the French National Investment Bank, Mistral AI, and U.S. Nvidia to plan the construction of a massive data center park in the Paris region, expected to cost several billion euros.

The defense sector may also follow this operational model. According to Bloomberg, the future goals of this investment structure may include defense groups from Western countries, drone manufacturers from Turkey or Ukraine, and various military technology companies in niche sectors. These targets outline the core of recent conflicts: drones, anti-drone systems, cybersecurity, autonomous systems, radar, and electronic warfare. Whether in Ukraine or the Middle East, the core status of these areas has become increasingly prominent, and military advantage now also depends on software, sensors, and jamming devices.

The impact of Iran has added new urgency to this strategy. For weeks, Gulf countries have been under the threat of drones and missiles. During a five-week armed conflict, thousands of weapons were aimed at the UAE. It is against this backdrop that UAE President Mohammed's rhetoric has become increasingly assertive.

In a few public speeches, Mohammed warned not to consider the UAE's prosperity as a form of weakness. He has stated, "The UAE is tough and resilient; we are not easy prey."

Abu Dhabi hopes to build this resilience to a greater extent on its own. Following recent attacks, Mohammed stated, "Strengthening our defensive capabilities will remain a core strategic priority." According to data from the Stockholm International Peace Research Institute, the UAE remains a major arms procurer—between 2021 and 2025, the country's total arms imports accounted for 2.7% of the global total. France is one of its key suppliers: the UAE has ordered 80 Rafale fighter jets from Dassault Aviation, the largest export order ever received by French fighter jets.

Meanwhile, Abu Dhabi has begun to build its own leading defense enterprises. Established in 2019 and formed by the merger of over 25 public entities, the EDGE defense group has become the UAE's main military industrial group, with annual sales of nearly $5 billion, 76% of which comes from exports.

The group primarily produces drones, missiles, ammunition, electronic warfare systems, and cyber solutions. Faisal Bin Nayef, Chairman of the EDGE defense group and advisor to the UAE President, stated that during the Iranian war, 85% of the drones targeting the country were successfully intercepted using domestically designed jamming devices.

This logic has already been put into practice: acquiring technology from abroad to strengthen domestic production and elevate industrial levels. After establishing a military shipbuilding joint venture with Italy's Fincantieri in 2024, the EDGE defense group also reached a partnership with the U.S. autonomous systems specialist Anduril last November to establish a joint venture with an investment of $200 million. (Translated by Liu Zhuo)