The United Arab Emirates (UAE) is rapidly establishing itself as a key player in the global artificial intelligence (AI) landscape, not simply as a consumer of US technology, but as a strategic partner and innovator. A recent announcement underscored this shift, with ADNOC (Abu Dhabi National Oil Company), Masdar, XRG, and Microsoft entering into a significant agreement. This collaboration will accelerate AI deployment within ADNOC’s operations while simultaneously providing energy solutions to support Microsoft’s expanding global AI and datacentre infrastructure. The announcement, unveiled at the ENACT Majlis in Abu Dhabi ahead of the ADIPEC energy conference, expands a pre-existing partnership between ADNOC and Microsoft and brings in Abu Dhabi’s renewable energy leader Masdar and its energy investment arm, XRG.
Expanding the Energy and AI Ecosystem in Abu Dhabi
The core of this partnership revolves around leveraging AI to optimize ADNOC’s entire value chain. ADNOC and Microsoft plan to jointly develop and implement AI agents designed to automate processes and enhance operational efficiency. Microsoft will provide advanced AI tools and upskilling programs to enable this transition. ADNOC has already demonstrated the power of generative AI, becoming the first energy company to deploy Microsoft Copilot enterprise-wide in November 2023. This initial rollout involved comprehensive AI training for over 40,000 employees, with utilization rates exceeding 90% since implementation. The company has subsequently experienced a significant boost in productivity, achieving over 70,000 hours per month of additional output since the enterprise-wide deployment.
Key Participants and Their Roles
The collaboration benefits from the distinct strengths of each organization involved:
- ADNOC: As the national oil company of Abu Dhabi, ADNOC brings extensive operational expertise and a vast infrastructure for energy production and distribution.
- Microsoft: The US technology giant contributes its leading-edge AI tools, cloud computing resources, and expertise in large-scale digital transformation.
- Masdar: A prominent renewable energy company jointly owned by TAQA, ADNOC, and Mubadala, Masdar provides sustainable energy development and investment capabilities. It has developed and invested in projects across more than 40 countries, boasting a combined capacity exceeding 50 gigawatts, with a target of reaching 100GW by 2030.
- XRG: Wholly owned by ADNOC and with an enterprise value exceeding $80 billion, XRG focuses on lower-carbon energy and chemicals, investing in companies that meet global demand for sustainable energy solutions and essential chemical building blocks.
A Shared Vision for the Future of Energy
Building on insights from the 2025 Powering Possible Report, which analyzed the impact of AI on the energy sector through the perspectives of over 850 global experts, the companies will explore a joint innovation ecosystem. This ecosystem aims to create transformative solutions specifically designed for the energy industry. This collaborative approach signals a commitment to shaping the future of energy through the integration of AI and sustainable practices.
Strategic Alignment with UAE-US Cooperation
The ADNOC-Microsoft partnership is closely aligned with broader strategic frameworks between the UAE and the United States. Recently, the two countries signed a memorandum of understanding (MoU) focused on accelerating cooperation in energy and AI applications within the energy sector. This agreement highlights the mutual desire to advance capabilities in areas such as smart manufacturing, robotics, materials engineering, and automation. This collaboration supports the UAE’s ambition to establish itself as a global hub for industry and advanced technology. The MoU, signed by ADNOC Chairman Dr. Sultan Ahmed Al Jaber and US Secretary of the Interior and National Energy Dominance Council Chairman Doug Burgum, underscores the commitment to technical collaboration, knowledge sharing, and capacity building.
The partnership is a significant step towards establishing Abu Dhabi as a key node in the global AI and energy landscape, combining local expertise with cutting-edge technology to drive innovation and sustainable growth.
The partnership between ADNOC, Masdar, XRG, and Microsoft reflects a strategic shift for Abu Dhabi—a commitment to becoming a central player in the global AI and sustainable energy landscape, not just a consumer of foreign technology. The focus on both operational AI deployment and the supply of energy solutions for Microsoft’s rapidly expanding AI infrastructure positions Abu Dhabi as a valuable partner for companies seeking both expertise and sustainable power sources
