By Faiza Kamal
When former U.S. President Donald Trump visited the United Arab Emirates earlier this year, the occasion wasn’t just a political show—it was a milestone in the Gulf’s technological transformation. The headline announcement was a colossal new artificial intelligence (AI) campus, developed through a UAE-US partnership and hailed as the largest AI hub outside the United States.
This move reflects a dramatic pivot by Gulf states like the UAE and Saudi Arabia, who are now harnessing their vast energy wealth, geographic advantage, and sovereign funds to establish themselves as AI leaders. The shift also came with softened U.S. restrictions on Nvidia’s powerful AI chips, underscoring Washington’s growing trust in its Gulf allies as strategic tech partners.
At the heart of the UAE’s AI drive is the “Stargate” project—an enormous data center cluster backed by Emirati tech firm G42 and supported by tech giants including Nvidia, Cisco, Oracle, and SoftBank. The infrastructure is being developed by Khazna, the UAE’s top data center operator, which currently runs 29 centers across the country.
“Much like Emirates airline turned Dubai into an aviation superhub, the UAE now aims to be the region’s nucleus for AI and data,” says Khazna CEO Hassan Alnaqbi.
In today’s digital world, “compute” power—driven by cutting-edge chips and massive data infrastructure—has become the new equivalent of oil. According to Mohammed Soliman of the Middle East Institute, just as Gulf oil fueled global growth in the 20th century, the region now aims to fuel the 21st-century AI economy.
Saudi Arabia is also diving into AI development. Its sovereign wealth fund, PIF, recently launched “Humain,” a national AI venture that plans to develop large-scale “AI factories” running on Nvidia technology.
The UAE’s state investment firm Mubadala is investing heavily as well, backing the $100 billion AI initiative MGX with Microsoft, and supporting homegrown projects like G42.
However, one major challenge remains: talent. While the Gulf is building top-tier infrastructure, it still lacks the AI research depth seen in regions like North America or Europe. To bridge that gap, countries like the UAE are offering attractive incentives like long-term visas, zero taxes, and relaxed regulations to draw international talent and companies.
Baghdad Gherras, a local AI startup founder, believes this will change with time: “We’re creating world-class infrastructure—talent will follow.”
This AI pivot has also shifted geopolitical alignments. To strengthen its bond with the U.S., the UAE has scaled back some Chinese-backed tech projects and limited its use of Huawei hardware, a clear nod to U.S. strategic concerns.
What once was a relationship grounded in oil and security is now evolving to include technology as a third pillar. The recent AI-focused deals, Soliman notes, are not only about development but also about competition—specifically with China. “The U.S. is integrating the Gulf into its AI stack to keep pace with China’s growing presence,” he says.
The AI stack refers to a complete tech pipeline—from chips to models to platforms—largely controlled by American companies today. Though China is rapidly building its own, it’s often more cost-effective, making it appealing for many nations.
While the Stargate project still awaits security clearance from U.S. officials due to concerns over Chinese ties, the expectation is that it will proceed, signaling a new tech era for the Gulf.
In forging ahead, Gulf nations may not only diversify away from oil—they could become essential players in the digital economy’s future, aligned with America’s AI ambitions.
