When former US President Donald Trump visited the United Arab Emirates (UAE) earlier this year, his trip transcended diplomatic pageantry, ushering in a landmark collaboration between the United States and Gulf nations in artificial intelligence (AI). Central to the visit was the unveiling of a sprawling new AI infrastructure campus in the UAE the largest of its kind outside the United States signalling a strategic pivot by both Washington and the Gulf states toward technological partnership, innovation, and economic diversification.
- The Largest AI Campus Outside the US: A New Frontier for Gulf Tech Ambitions
- “Compute is the New Oil”: Gulf States’ Economic Transformation
- Strategic Realignment in the US-Gulf Relationship: Beyond Oil and Security
- Navigating the US-China Tech Rivalry in the Gulf
- Addressing Talent and Regulatory Challenges
- Broader Implications for the Global AI Race
The Largest AI Campus Outside the US: A New Frontier for Gulf Tech Ambitions
The joint UAE-US AI campus represents a monumental investment in data infrastructure and processing capacity, with the multibillion-dollar Stargate project spearheaded by G42, an Emirati state-linked technology firm. Designed to host high-performance data centres critical for training advanced AI models, Stargate embodies the UAE’s ambition to become a global AI hub, reducing its historic reliance on hydrocarbon revenues.
Abu Dhabi, home to 29 operational data centres managed by Khazna G42’s majority-owned infrastructure arm is at the forefront of this initiative. Hassan Alnaqbi, CEO of Khazna, compared the country’s evolving AI ambitions to its transformation into a global air travel hub. “Just like Emirates helped turn the UAE into a global hub for air travel, now the UAE is at a stage where it can become an AI and data hub,” Alnaqbi stated.
Tech giants like Nvidia, Cisco, Oracle, and Japan’s SoftBank are collaborating with G42 on the first phase of the project, with Nvidia supplying its most advanced AI microchips to power the underlying compute capacity.
“Compute is the New Oil”: Gulf States’ Economic Transformation
Mohammed Soliman, a senior fellow at the Middle East Institute in Washington DC, articulated the region’s shifting economic landscape: “Compute is the new oil.” In this context, “compute” denotes the immense processing power enabled by cutting-edge chips and large-scale data centres—now considered the backbone of the AI-driven global economy.
The Gulf’s sovereign wealth funds have traditionally invested passively in foreign technology ventures. However, the current wave marks a strategic shift toward developing homegrown technology ecosystems. Saudi Arabia’s Public Investment Fund (PIF) recently launched Humain, a national AI company planning to build “AI factories” powered by hundreds of thousands of Nvidia chips.
In the UAE, Mubadala Investment Company backs G42 and MGX, a $100 billion joint venture focused on AI, with strategic technology partnerships that include Microsoft. These investments aim to cultivate domestic innovation while attracting global firms.
Strategic Realignment in the US-Gulf Relationship: Beyond Oil and Security
Trump’s visit also coincided with a notable easing of US export controls on Nvidia’s most powerful AI microchips, allowing greater access for both the UAE and Saudi Arabia. This regulatory shift underscores the evolving view of the Gulf states as strategic partners not just for energy and security, but for technology leadership in a competitive global environment.
“Traditionally, the US-Gulf relationship has centred around oil-for-security. But the dynamic is now shifting toward energy, security and tech,” observed Sameer Hashmi, the Business Correspondent reporting from Dubai.
The proximity of Gulf states to Asian and European markets, coupled with abundant energy resources, has made the region attractive not only as an emerging AI hub but also as a critical node in the global technology supply chain.
Navigating the US-China Tech Rivalry in the Gulf
The burgeoning US-Gulf AI partnership has catalysed an increasingly delicate balancing act involving China’s expanding technology presence in the region. The UAE has scaled back some China-backed ventures and reduced reliance on Huawei hardware, indicating a strategic tilt toward the United States.
“It’s basically the US trying to bring a promising, rising AI region the Gulf into the American AI stack, to be on Team America AI,” said Mr. Soliman. The “AI stack” refers to the comprehensive ecosystem of AI hardware, infrastructure, models, and software predominantly controlled by US firms.
However, Chinese tech remains influential. While it may not match the capabilities of the American AI stack, China offers cost-effective alternatives that appeal to a broad range of countries. “They’re scaling fast. Their AI stack may be cheaper, and for many countries, good enough is good enough,” he added.
This geopolitical competition adds layers of complexity, with US authorities reportedly vetting Stargate and related projects for potential Chinese involvement. Reuters reported that the Stargate deal is still pending certain US security clearances.
Addressing Talent and Regulatory Challenges
Despite significant investments, the Gulf faces challenges in cultivating globally competitive AI talent. Baghdad Gherras, founder of a UAE-based AI startup and venture investor, highlighted the region’s small population just over 10 million as a limiting factor for building a deep research ecosystem.
“Our strategy includes attracting overseas companies and researchers with incentives such as low taxes, long-term golden visas, and business-friendly regulation,” Gherras said. “Building world-class digital and AI infrastructure will act as a magnet for talent.”
Currently, the Gulf has yet to produce AI companies with the global recognition of OpenAI, Mistral, or DeepMind, but the ecosystem is rapidly evolving.
Broader Implications for the Global AI Race
The emergence of Gulf states as AI stakeholders represents an important development in the global technology landscape, offering the United States a strategic partner beyond traditional energy and security frameworks. For the Gulf, AI technology promises a pathway to economic diversification and sustainability in a post-oil era.
“The US gains allies in its quest to outflank China in AI and compute capabilities; the Gulf nations gain a powerful partner in their efforts to replace oil revenues with future-proof knowledge-based sectors,” concluded Sameer Hashmi.
As Gulf AI infrastructure grows, the region is poised to become a key player in the international AI arena, with ripple effects on geopolitics, cybersecurity, and global economic structures.
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