South Korea and the United Arab Emirates (UAE) are set to deepen their collaboration in artificial intelligence (AI) and related sectors following a recent summit between their leaders. During the Seoul-Abu Dhabi summit, South Korean President Lee Jae Myung and UAE President Mohamed bin Zayed Al Nahyan agreed on the importance of joint investment, development, and marketing efforts in the AI field, as well as integrating AI with energy and defense industries. This mutual understanding led to the signing of seven memorandums of understanding (MOUs) aimed at expanding bilateral cooperation across these strategic sectors.
In a significant development announced shortly after the summit, South Korea’s presidential AI committee revealed plans to establish a dedicated task force to advance AI cooperation with the UAE. This task force will be co-led by the presidential secretary for AI policy and future planning, alongside the vice chairman of the Korea Chamber of Commerce and Industry (KCCI). Its primary objective is to build a joint public-private implementation system that facilitates the realization of the partnership’s outcomes. Within the year, the task force is expected to identify and present substantial investment projects that will drive progress in AI and related industries between the two countries.
The task force’s structure includes five working groups, each supervised by relevant South Korean ministries, notably the Ministry of Science and ICT and the Ministry of Climate, Environment and Energy. These groups will focus on various aspects of the collaboration, ensuring a coordinated approach that leverages expertise across multiple sectors. The involvement of these ministries underscores the comprehensive nature of the partnership, which aims not only to advance AI technology but also to align it with environmental and energy priorities.
A cornerstone of this collaboration is South Korea’s participation in the UAE’s ambitious Stargate project. This initiative plans to establish a large-scale AI data center cluster in Abu Dhabi, starting with a 200-megawatt facility expected to become operational next year. The larger vision is to develop a 5-gigawatt AI campus, positioning Abu Dhabi as a global hub for AI research and infrastructure. Through the framework agreement on strategic AI collaboration, South Korea will contribute to the development of this AI and energy infrastructure, combining the strengths and resources of both nations.
The Stargate project represents a forward-looking investment in cutting-edge technology and energy management, with potential to drive innovation and economic growth in the region. By partnering on this project, South Korea gains access to a major AI hub in the Middle East, while the UAE benefits from South Korea’s technological expertise and experience in AI development. This synergy is expected to open doors for further joint ventures and technological exchange, strengthening the bilateral relationship beyond traditional diplomatic ties.
However, the news of expanded AI cooperation between South Korea and the UAE emerged amid some turbulence in South Korea’s financial markets. On the Monday following the summit, South Korean stocks declined for the second consecutive trading session, reflecting ongoing concerns about the AI sector’s short-term prospects. The benchmark Korea Composite Stock Price Index (KOSPI) fell by 7.2 points, or 0.19 percent, closing at 3,846.06. This followed a steeper 3.79 percent drop during the previous trading day, indicating a cautious investor sentiment toward AI-related businesses.
Despite opening higher due to foreign buying spurred by renewed optimism about a potential interest rate cut in the United States, the KOSPI faced selling pressure from offshore investors in the afternoon, which contributed to the index’s overall decline. The day's trading volume was moderate, with 363.4 million shares exchanged, valued at approximately 20.3 trillion won (around US$13.8 billion). Market activity saw more declining stocks than advancing ones, with 576 decliners versus 306 gainers, signaling a cautious mood among investors.
In tandem with the stock market fluctuations, South Korea’s local currency weakened significantly against the US dollar. This depreciation added to the economic uncertainties currently facing the country, highlighting the complex interplay between global financial trends and domestic market conditions. While the long-term outlook for AI collaboration between South Korea and the UAE appears promising, short-term market reactions reflect investor concerns about the pace and impact of AI sector developments.
The establishment of the joint task force and the signing of multiple MOUs mark a strategic milestone in South Korea-UAE relations. Beyond AI, the agreements encompass cooperation in energy and defense industries, indicating a broad-based partnership aimed at technological advancement and mutual economic benefit. The integration of AI with energy and defense sectors is particularly notable, as it suggests