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The United Arab Emirates plans to invest 40 billion euros ($46.4 billion) in Germany as the two countries deepen their economic ties, with data center infrastructure forming a key part of the investment. The investment was announced during a state visit to Germany this week by UAE President Sheikh Mohamed bin Zayed Al Nahyan, who met with German Chancellor Friedrich Merz. It spans areas including artificial intelligence, digital infrastructure and energy. The two countries also announced plans to deepen defense cooperation. The package will include roughly 1 gigawatt of new data-center capacity, while 10 billion euros is reportedly earmarked for investment in Bavaria, a major hub for Germany's industrial and tech sectors. The two countries also signed a declaration of intent to form an investment council aimed at advancing investment and strengthening public- and private-sector ties. The UAE, like all Gulf countries, is keen to diversify its overseas portfolio and develop an economy that moves beyond oil, said Paul Musgrave, associate professor of government at Georgetown University in Qatar. "Abu Dhabi is also looking at the possibility of having specific investments in supply chains, specific investments in corporations, and using this for strategic purposes, including, of course, developing new friends and influence in Europe, and making sure that it has strong ties with an economy and a military-industrial sector that is among the world's leading competitors in that sphere," Musgrave told CNBC's "Access Middle East" Friday. "For Germany, this is something that really helps because Germany is in a bit of an economic doldrums right now, it needs to have something that Chancellor Merz can deliver as a win." The UAE is a key trading partner for Germany in the Gulf region. Bilateral non-oil trade reached $15.5 billion in 2025, the two countries said in a joint declaration on Thursday. The UAE has already invested about 34 billion euros in Germany, Europe's largest economy, including in its chemicals and renewable energy sectors. The UAE is "very keen" to connect its economy, trade and investments with economic hubs around the world, the UAE's Minister of Foreign Trade Thani Al Zeyoudi told Bloomberg TV in Berlin on Thursday.
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