For decades, Gulf countries relied heavily on oil, but now they are rapidly shifting towards technology, sports, and military equipment. Saudi Arabia, UAE, and Qatar have partnered with American companies like Microsoft, OpenAI, Nvidia, and AMD to initiate large-scale data centers and AI chip projects.
After amassing vast wealth from oil, Gulf nations are now turning their focus towards artificial intelligence (AI). Saudi Arabia, the UAE, and Qatar are heavily investing in AI to strengthen their position in future technologies and to secure significant profits.
From Oil to Technology
For years, Gulf countries have been dependent on oil, but now they are swiftly pivoting towards technology, sports, and military equipment. With falling crude oil prices and ongoing changes in global energy policies, these countries believe that investing in AI and data infrastructure will boost their economies. Saudi Arabia, UAE, and Qatar have teamed up with American companies like Microsoft, OpenAI, Nvidia, and AMD to kickstart major data center and AI chip projects.
Distancing from China, Strengthening Ties with the U.S.
After U.S. President Donald Trump’s visit to the Gulf this year, signals emerged that the U.S. might relax some restrictions on chip exports. Previously, the U.S. was concerned that advanced American chips could end up in China via Gulf countries. The UAE and Saudi Arabia have attempted to prove, through significant American tech deals, that they are choosing the U.S. as their technology partner over China.
Microsoft’s Big Bet
Abu Dhabi is currently leading the charge in AI investments. Its three major sovereign wealth funds manage a combined total of $1.7 trillion. These funds include ADIA, Mubadala, and ADQ. The UAE’s leading AI company, G42, is rapidly advancing with the help of partners like Microsoft and other investors. The responsibility for G42 has been entrusted to National Security Advisor Sheikh Tahnoun bin Zayed Al Nahyan.
Microsoft announced an investment of $15.2 billion in the UAE between 2023 and 2029, while also investing $1.5 billion in G42 and securing a seat on its board. G42 and Mubadala together manage a tech fund called MGX, with the goal of raising over $100 billion in assets. MGX has invested in companies like OpenAI, Elon Musk’s xAI, and Anthropic. Recently, the fund invested $40 billion in Aligned Data Centers.
‘Humain’ is the Arabic World’s ChatGPT
Saudi Arabia is creating a national AI company named ‘Humain’ with the help of its Public Investment Fund (PIF). Humain’s goal is to develop data centers, cloud platforms, and large language models in Arabic. Recently, the company launched ‘Humain Chat,’ the Arabic version of ChatGPT. Saudi Arabia has also announced the purchase of 18,000 AI chips from Nvidia and a $10 billion partnership with AMD. The country aims to achieve a data center capacity of 1.9 gigawatts by 2030 and 6.6 gigawatts by 2034.
Qatar’s ‘AI+X’ Strategy
Qatar has taken a different approach. The country is working on the “AI+X” model, which integrates AI into sectors like education, healthcare, governance, and business. The Qatar Investment Authority (QIA) has invested in companies like Anthropic, Databricks, Cresta, and Applied Intuition. Additionally, it is a major investor in the $6 billion funding round of Elon Musk’s xAI. QIA manages $524 billion in assets.
Talent and Water Issues Are Major Challenges
Despite billions in AI investments, Gulf countries still face several major challenges. Experts suggest that there is a severe shortage of AI professionals in these countries. In Saudi Arabia alone, there is a 50% gap in AI-related jobs. Additionally, operating data centers in the desert is both costly and environmentally risky. On average, a data center requires around 300,000 gallons of water daily to keep it cool.
Money Is Not the Problem, Execution Is
According to UBS Investment Bank analyst Ulyana Lenvalskaya, “The challenge now is not money, but execution.” Gulf countries will have to prove that they can not only invest in AI but also attract talent, create better regulatory frameworks, and build trust with global partners. Currently, Saudi Arabia and the UAE’s trillion-dollar AI bet has captured the world’s attention and may turn out to be their biggest wager for the future, after oil.
