When I came across the recent news of Donald Trump’s visit to the United Arab Emirates earlier this year, it wasn’t just the typical diplomatic fanfare that caught my eye. Instead, it was the unveiling of a massive new AI campus—an ambitious joint initiative between the UAE and the US that’s being hailed as the largest AI infrastructure hub outside the US. This move signals a striking shift in the Gulf’s grand strategy, positioning itself at the forefront of the global AI revolution.
The Gulf states are betting big on AI as the ‘new oil’—and that means leveraging their wealth, geography, and energy assets to become key players in the 21st-century technology economy. As I dug deeper, it became clear that while oil was the driving force of the last century, compute power and AI infrastructure are rapidly becoming the region’s new currency.
“Compute is the new oil.” This simple phrase captures the essence of how the Gulf is redefining its future economy.
Building the foundation: AI data centres at the heart of the transformation
The centerpiece of this regional pivot is infrastructure—specifically, large-scale data centres. Abu Dhabi’s “Stargate” project is a multibillion-dollar effort to create a sprawling cluster of data centres meant to power AI development, hosted by state-linked Emirati tech company G42. This project involves collaborations with heavyweights like Nvidia, Cisco, Oracle, and Japan’s SoftBank, with Nvidia supplying the most advanced chips.
Hassan Alnaqbi, CEO of Khazna—the UAE’s largest data centre operator and a majority G42-owned company—summed it up perfectly: just like Emirates Airlines turned the UAE into a global air travel hub, the country is now striving to become a global AI and data hub. Khazna already runs 29 data centres across the UAE, laying out the infrastructure backbone for this AI future.
Saudi Arabia isn’t falling behind either. Their Public Investment Fund (PIF) recently launched an AI national company, Humain, which plans to build “AI factories” equipped with hundreds of thousands of Nvidia chips. Meanwhile, other Gulf sovereign funds, like Abu Dhabi’s Mubadala, are pouring billions into joint ventures with tech giants such as Microsoft and nurturing homegrown AI projects.
Strategic alliance and geopolitical shifts behind the AI push
The timing of Trump’s visit was no coincidence. It coincided with the US relaxing restrictions on exporting Nvidia’s most powerful microchips to the UAE and Saudi Arabia, signaling a deepening technological alliance. This strategic move is part of the broader US effort to secure the Gulf as a vital partner in AI development, especially amid rising tensions and competition with China.
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According to experts I came across, much of these AI deals aren’t just about the Gulf states themselves—they’re a clear play in the escalating US-China tech rivalry. The Gulf’s choice to align with the US over China, including scaling back China-backed projects and Huawei hardware, highlights a pragmatic approach to securing the region’s AI future.
Mohammed Soliman, senior fellow at the Middle East Institute, pointed out that Gulf oil companies essentially powered the 20th-century economy. Now, AI companies in the region want to be the “compute” powerhouses for today’s digital economy, offering the processing capabilities that fuel modern AI innovation.
The talent challenge and what it means for the AI ecosystem
One of the biggest hurdles for the Gulf states is attracting the highly skilled AI talent needed to build a world-class research and development ecosystem. The UAE, with a population of just over 10 million, faces natural limits to scale its AI workforce domestically. To tackle this, governments have introduced enticing incentives like low taxes, long-term “golden visas,” and lighter regulatory frameworks to lure international talent and AI companies.
Baghdad Gherras, founder of a UAE-based AI startup and venture investor, mentioned that establishing top-tier digital infrastructure acts as a powerful magnet for talent and innovation. However, despite these efforts, the Gulf still lacks a globally recognized AI company comparable to OpenAI, Mistral, or DeepSeek.
Still, the push is on—and the Gulf’s geographical position between Asia and Europe offers a unique strategic advantage to become a digital crossroads in this AI-powered era.
“Building world-class digital and AI infrastructure will act as a magnet for global AI talent and innovation.”
Key takeaways for AIholics
- Compute power is the Gulf’s new gold: The investment in AI data centres and chips is a foundational move to transition from fossil fuels to technology-driven growth.
- US-Gulf AI partnerships reflect deeper geopolitics: The Gulf’s alignment with the US tech ecosystem is as much about navigating global power dynamics as it is about advancing AI capabilities.
- Talent remains the missing link: Despite the infrastructure boom, cultivating homegrown AI expertise and attracting global talent remains an ongoing challenge for the region.
Wrapping up: The Gulf’s AI ambitions are reshaping the region’s future
The Gulf’s bold bet on AI signals a profound transformation. It’s a move from being a resource-based economy to becoming a hub for the foundational digital infrastructure critical to the AI age. The multibillion-dollar investments, strategic alliances, and infrastructure build-out underscore a clear recognition that AI and compute power will fuel the next global economy.
While challenges remain—especially in talent development—the momentum is undeniable. The Gulf’s efforts not only open interesting opportunities for innovation but also introduce complex geopolitical implications as global powers jockey for influence in the AI domain.
For anyone watching the evolution of global AI, the Gulf states have firmly stamped themselves as ones to watch. It’s no longer just about oil—now, it’s about mastering the new fuel of the digital age: compute.
