Italy signs $2.5 billion AI deal with UAE to build “cognitive cities”

Old World unite!

Italy‘s landmark $2.5 billion AI deal with the UAE signals a significant shift in urban management as cities worldwide seek technological solutions to complex infrastructure challenges. The agreement between Italian AI firm Synapsia and UAE’s Bold Technologies represents one of the largest international AI contracts to date, positioning both Italy as a technology exporter and the UAE as an emerging AI hub amid growing regional competition from Qatar and Saudi Arabia.

The big picture: Synapsia has secured a $2.5 billion contract with UAE’s Bold Technologies to develop AI-powered city management systems for Abu Dhabi.

• The Italian company will create technology addressing urban challenges including transportation, parking, and emergency response capabilities.
• Synapsia CEO Daniele Marinelli described the initiative as a “cognitive city project, an evolution of the smart city concept” in an interview with Reuters.

Key details: The contract, signed on March 3, structures the $2.5 billion payment in five installments over 18 months tied to project milestones.

• The companies will form a new joint venture called My Aion Inc. with plans for an initial public offering on the Abu Dhabi stock exchange between 2027 and 2029.
• The technology aims to transform Abu Dhabi from a city with “inefficient data silos” into one with “autonomous, self-learning urban networks” that optimize infrastructure in real-time.

Broader context: The deal aligns with Prime Minister Giorgia Meloni’s strategy to strengthen Italy’s economic ties with Gulf nations despite political opposition citing human rights concerns.

• At a February bilateral summit, Meloni announced the UAE had pledged $40 billion in investments in Italy, though no specific timeframe was provided.
• The UAE, a wealthy oil producer, is engaged in intensifying competition with neighboring Qatar and Saudi Arabia to establish regional AI leadership.

Why this matters: This partnership represents a significant transfer of AI expertise into urban infrastructure management, potentially setting new standards for how emerging technologies can address complex city operations beyond conventional smart city applications.