The Gulf's AI Revolution: Can Compute Replace Oil?

When Donald Trump visited the United Arab Emirates (UAE), he didn’t just bring headlines; he ignited a technological ambition. His trip heralded the launch of an extensive AI campus, the largest of its kind outside the US, marking a significant initiative for the Gulf states to embed themselves within the global AI landscape. The US is now viewing its Gulf allies, particularly the UAE and Saudi Arabia, as vital partners in a burgeoning technological alliance, favoring a strategic pivot towards advanced microchips from companies like Nvidia.

The Gulf’s ambitious plans encompass leveraging their sovereign wealth, geographical advantage, and abundant oil resources to establish themselves as AI hubs. Central to these aspirations are data centers, such as Abu Dhabi’s monumental Stargate project, aimed at creating a cluster of data centers for major tech firms like OpenAI and funded by G42, a UAE-linked tech firm.

The phrase ”Compute is the new oil” encapsulates the region’s shift to AI, as the need for vast processing power will drive economic power in the 21st century, akin to how oil shaped the past century. Tech investments from Gulf sovereign funds are morphing from passive to proactive, with Saudi Arabia’s Public Investment Fund launching its own AI venture, Humain, and the UAE’s Mubadala backing significant tech initiatives.

Despite the momentum, talent acquisition presents a major challenge for the UAE, as local expertise in AI remains limited. The push for low taxes, long-term golden visas, and light regulation is part of the UAE’s strategy to attract international AI talent, yet it competes against established firms like OpenAI with robust research infrastructures. The Gulf states’ ascent in the AI arena also intertwines with US-China relations, as the UAE moves away from certain technology partnerships with China, opting for American collaboration amid geopolitical shifts.

Mr. Soliman at the Middle East Institute notes that the deals formed during Trump’s visit sought to integrate the Gulf’s potential into the American AI framework. Yet, the multibillion-dollar Stargate deal is awaiting clearance, reflecting US concerns over Chinese tech involvement. Despite these uncertainties, the cooperation aims to benefit both the US and Gulf countries, with the former gaining strategic allies in AI and the latter working to diversify their economies beyond oil.