The Gulf bets large on AI because it seeks the ‘new oil’

When Donald Trump touched down within the United Arab Emirates (UAE) earlier this 12 months, he arrived not simply with headlines, however with offers, ambition, and AI firepower.

The US president was given a royal welcome, however the true centrepiece of the go to was the announcement of a sprawling new AI campus – a joint UAE-US initiative.

Billed as the most important AI infrastructure hub exterior the US, it symbolised the Gulf’s boldest bid but to plant itself on the coronary heart of the worldwide AI map.

Trump’s go to to the Gulf additionally coincided with a strategic shift, which noticed the White Home easing restrictions on exporting probably the most highly effective microchips from US agency Nvidia to each the UAE and Saudi Arabia.

This transfer underscored how a lot the US now sees its Gulf allies as companions in a wider technological alliance.

The Gulf states are deploying their sovereign wealth, geography, and power edge (numerous oil) to place themselves as AI hubs. Know-how is central to their plans to cut back future dependence on earnings from fossil fuels.

The UAE, specifically, is main the cost. And knowledge centres lie on the coronary heart of this effort. Abu Dhabi has introduced a large knowledge centre cluster for OpenAI and different US companies as a part of the “Stargate” challenge.

The multibillion greenback deal is being funded by G42, an Emirati state-linked tech agency driving the nation’s AI ambitions. Nvidia will provide its most superior chips.

Tech giants Cisco and Oracle, together with Japan’s SoftBank, are additionally working with G42 to construct the primary part.

“Similar to Emirates helped flip the UAE into a worldwide hub for air journey, now the UAE is at a stage the place it might probably change into an AI and knowledge hub,” says Hassan Alnaqbi, CEO of Khazna, the UAE’s largest knowledge centre operator.

Khazna, which is majority owned by G42, is constructing the infrastructure for Stargate. The corporate presently operates 29 knowledge centres throughout the UAE.

The UAE and Saudi Arabia need to host the info centres wanted to coach highly effective AI fashions. “Compute is the brand new oil,” says Mohammed Soliman, senior fellow on the Center East Institute in Washington DC.

Within the context of AI, compute refers back to the huge processing energy enabled by high-end chips and large-scale knowledge centres – the type the Gulf is now investing billions to construct.

In immediately’s AI-driven world, infrastructure is the brand new gasoline – in the identical approach oil was within the industrial age.

Mr Soliman says that simply as Gulf-based oil firms powered the worldwide economic system within the final century, AI companies within the area now need to provide “compute” to energy the worldwide economic system of the twenty first.

Gulf sovereign funds have poured billions into overseas tech giants lately. However now, they’re pivoting from being passive buyers to extra energetic gamers.

In Saudi Arabia, the Public Funding Fund (PIF) has launched a nationwide AI firm – Humain – which plans to construct “AI factories” powered by a number of hundred thousand Nvidia chips over the following 5 years.

Within the UAE, state-owned funding agency Mubadala has backed G42 and MGFX – a $100bn (£75bn) AI-focused three way partnership with Microsoft – and different homegrown initiatives.

Nevertheless, attracting highly-skilled AI expertise stays a big problem. To handle this, the UAE is wooing abroad firms and researchers with low taxes, long-term “golden visas”, and lighter regulation.

“Constructing world-class digital and AI infrastructure will act as a magnet,” says Baghdad Gherras, founding father of a UAE-based AI start-up and a enterprise investor.

At present, the area has but to supply a globally recognised AI firm like OpenAI, Mistral, or DeepSeek, and it nonetheless lacks a deep bench of world-class analysis expertise.

Mr Gherras factors to the UAE’s small inhabitants – simply over 10 million – as a limiting consider constructing a large-scale analysis ecosystem.

The emergence of Gulf states as bold AI gamers has introduced the US-China tech rivalry to the forefront within the desert.

Trump’s go to gave Washington a robust lead within the area’s AI race – however at a value. As a part of its strategic pivot, the UAE has scaled again some China-backed initiatives and decreased its reliance on Huawei {hardware}.

The emphasis on AI offers throughout Trump’s go to underscores the rising strategic significance of the know-how to US diplomacy.

Historically, the US-Gulf relationship has centred round oil-for-security. However the dynamic is now shifting towards power, safety – and tech.

On the Center East Institute, Mr Soliman says the AI offers signed throughout Trump’s go to “are extra about China than concerning the Gulf”.

“It is principally us making an attempt to convey a promising, rising AI area – which is the Gulf – into the American AI stack, to be on Staff America AI,” he says.

The “AI stack” refers back to the full pipeline of AI functionality: chips, infrastructure, fashions, and software program – principally dominated by US firms.

Mr Gherras says selecting the US over China was a rational alternative.

“At this stage the People are forward within the AI sport. So, it made sense for the UAE to wager on them,” he says.

Nevertheless, based on a Reuters report, the multibillion-dollar Stargate deal continues to be awaiting safety clearance, as US officers stay involved about potential Chinese language personnel or know-how being concerned in UAE knowledge centres.

However, the challenge is predicted to go forward, with US companies rallying behind it.

However whereas the US presently leads in AI, Mr Soliman warns towards underestimating China.

“They’re scaling quick. They have already got an AI stack. It might not be as highly effective as America’s, however it’s cheaper. And for a lot of international locations, adequate is nice sufficient.”

For now, although, each the US and the Gulf stand to learn from their cooperation.

The US features allies in its quest to outflank the Chinese language within the area of AI and compute – the Gulf nations get a strong companion of their seek for a alternative for oil revenues.