Is AI the key to prosperity after oil?
In a series of landmark deals made by President Trump at the end of May, the United States is rapidly expanding its AI footprint in the Middle East, with the United Arab Emirates and Saudi Arabia emerging as key partners. In the UAE, state-backed AI firm G42 has secured a deal to import 500,000 Nvidia chips annually, with most routed to U.S. firms like Microsoft. G42 is also building a 5GW AI data centre campus in Abu Dhabi—set to be the largest outside the U.S.—while Microsoft and AWS ramp up local investments. Meanwhile, MGX, backed by another state-owned firm, Mubadala, as well as G42, plans to invest $100 billion in AI infrastructure and is supporting OpenAI’s $500 million Stargate project. These moves are expected to significantly boost the UAE’s digital economy, with projections of $181 billion in added value by 2033.
Saudi Arabia is pursuing a similarly ambitious path, anchored by a $600 billion AI investment package that could rise to $1 trillion. U.S. tech giants including Oracle, Google, and AWS are committing billions to AI zones, data centres, and cloud services across the kingdom. Saudi AI firm HUMAIN plans to deploy $20 billion worth of Nvidia and AMD hardware, and has signed a development deal with Qualcomm. The Public Investment Fund and Google Cloud are jointly investing $10 billion in a new AI hub, while U.S. chip startup Groq has secured $1.5 billion to expand operations in Dammam. Qatar, while less focused on AI infrastructure, has committed $1.2 trillion in broader tech and quantum computing ventures. These partnerships mark a strategic U.S. effort to entrench its AI leadership in the region and counter China’s growing influence.
Epicon is one of multiple investments taking shape as part of Saudi Arabia's NEOM project. © NEOM.com.
Economic implications of the deal
These agreements are expected to unlock vast sums for AI infrastructure with Saudi Arabia's initial $600 billion over four years, alongside Qatar's $1.2 trillion commitment. In addition to thse two main partners, the UAE will add $200 billion to its existing $1.4 trillion AI strategy. Much of this capital will fund AI development both in the Gulf as well as in the USA, helping to ease financing pressures amid tighter credit conditions and trade uncertainties.
The Gulf is also positioning itself as a new AI hub. With abundant energy and capital, countries like Saudi Arabia and the UAE are building large-scale data centres to relieve pressure on US infrastructure. By 2030, the region is expected to host more than 6 gigawatts of data capacity, which aligns with broader efforts to diversify away from oil, with AI seen as a key driver of future growth. Saudi Arabia, in particular, aims to become a global provider of AI computing power, targeting emerging markets across Africa and Asia, while the region’s AI market in financial services alone is forecast to grow from $625 million in 2023 to $4.7 billion by 2032.
Both Saudi Arabia and the the UAE efforts to diversify their economies beyond oil, with each country positioning artificial intelligence as a cornerstone of their post-oil futures. Saudi Arabia’s Vision 2030 strategy explicitly targets a shift from oil dependency—once responsible for over 40% of GDP and 80% of exports—towards a digital economy powered by AI. Backed by over $40 billion in AI-related investments from the Public Investment Fund, the kingdom is building out data centres, semiconductor capacity, and energy infrastructure, aiming to become a leading provider of compute-as-a-service for emerging markets across Africa and Asia. With 2.2GW of IT load capacity under development, Saudi Arabia is leveraging its low-cost energy advantage to support energy-intensive AI operations.
The UAE, meanwhile, has taken a proactive approach, appointing the world’s first Minister of State for AI and founding the Mohamed bin Zayed University of Artificial Intelligence. Both nations are pursuing “AI sovereignty”—seeking control over their own compute power, data, and cloud infrastructure to reduce reliance on foreign platforms. By becoming global AI hubs, both countries hope to be capable of shaping international norms and projecting soft power through technological leadership. By 2030, they are expected to command significant operational data centre capacity, reinforcing their roles as digital powerhouses in the region.
What are the geopolitical implications?
Clearly one outcome of these landmark agreements is to bind Riyadh and Abu Dhabi more closely to American technology, embedding U.S. hardware and software at the heart of their AI ambitions. Analysts see this as a strategic play to outpace China in the region, especially as Washington tightens export controls on Chinese firms like Huawei. The shift marks a clear departure from the Biden administration’s restrictive tech policies: under Trump, the U.S. has pivoted to a more assertive strategy—arming allies with cutting-edge AI tools. This redefines the traditional oil-for-security relationship with Gulf states into one centred on digital infrastructure and AI ecosystems.
For Gulf nations, AI is central to their post-oil economic vision. They seek “AI sovereignty”—control over data, compute power, and cloud platforms. While the U.S. aims to secure dominance, Gulf capitals are keen to maintain a balancing act between Washington and Beijing. In support of the former, high-profile tech leaders, including Nvidia’s Jensen Huang and OpenAI’s Sam Altman, have joined diplomatic efforts, blurring the line between business and foreign policy.
However, the deals come with risks. U.S. officials are wary of potential GPU diversion to China and misuse by malicious actors. Proposed safeguards include strict customer vetting, physical inspections, and multi-layered cybersecurity protocols. Critics warn that empowering Gulf monarchies with advanced AI could backfire—fueling surveillance, repression, or military use. There are also concerns about double standards, as allies in Europe and Asia face tighter restrictions. Once deployed, experts say, these technologies are almost impossible to claw back.
This article was co-created with AI.