Microsoft's president and vice chairman Brad Smith on Thursday praised Abu Dhabi's AI initiatives and apps, which he said empower residents.
"We need to bring it to America," he told a US Senate commerce, science and transport committee hearing, referring to the need for apps that simplify the process of renewing driver licences, reporting potholes, obtaining various forms and other services.
"You can do all these things with your phone, by the way and you can do this today in Abu Dhabi."
Mr Smith did not specify what app he was referring to, but in February at a UAE event, Charles Lamanna, Microsoft's corporate vice president of business and industry, witnessed how the company's AI products were being used in various UAE-made apps.
At one point, he was shown Abu Dhabi's TAMM government services AI assistant, which acts as a one-stop shop for government services including transport, health care, housing and police services.
“We are moving away from large language models to large action models,” Wael AbuRizq, AI and advanced analytics adviser with the Department of Government Enablement, said at the demonstration of the app, which uses Microsoft technology.
Mr Lamanna told The National that TAMM's demonstration was among some of the most impressive he had seen in his travels throughout the world.
Microsoft has been a proponent of the UAE's AI aspirations in recent years. The company made a $1.5 billion investment in UAE AI and cloud company G42 in 2024, and later announced that it would open its research-based 'AI for Good Lab' in Abu Dhabi, a first in the Middle East.
Mr Smith was joined at the Senate hearing by OpenAI chief executive Sam Altman, Advanced Micro Devices chief Lisa Su and CoreWeave boss Michael Intrator.
US President Donald Trump is preparing to visit the UAE during a trip to the Gulf.
On Wednesday, he told reporters that his administration might soon change a controversial chip export policy that some say could stifle AI aspirations in the UAE and other countries in the region.
"We might be doing that, and it’ll be announced soon," Mr Trump said in the Oval Office.
The policy, referred to as the AI diffusion rule, was drafted during the final months of former president Joe Biden's administration as it sought to protect the US lead on AI development by preventing highly powerful central processing units and graphic processing units from being obtained by rival countries, such as China.
Under the chip export rules, countries and territories would be split into tiers that would determine how many powerful chips and GPUs they could buy.
Falling into the first tier and unaffected by the rules are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the UK.
Other countries, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE and Saudi Arabia, would fall into a second-tier category, making it more difficult – although not impossible – to obtain the chips needed for AI research and development.
Microsoft has openly criticised the proposed policy. “Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecoms a decade ago,” Mr Smith said in February.
“This tier-two status is undermining one of the essential requirements needed for a business to succeed – namely, confidence by our customers that they will be able to buy from us the AI computing capacity that they will need in the future."
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Title: Assistant dean of students and director of athletics
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Favourite player: Franz Beckenbauer
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
