Gulf States Invest Billions in AI to Secure Post-Oil Future

The UAE and Saudi Arabia are investing billions into AI infrastructure, partnering with US firms to reduce reliance on oil. Major projects like Stargate aim to turn the Gulf into a global AI hub. While talent remains a challenge, strategic US partnerships mark a turning point in the region’s tech ambitions.

The Gulf region is making a massive push into artificial intelligence, aiming to become a global leader in the AI race. In a significant move, the United Arab Emirates (UAE) and the United States announced a joint AI campus, hailed as the largest outside the US, marking a shift in regional priorities from oil to advanced technology.

This AI-focused partnership was highlighted during former US President Donald Trump’s visit to the UAE earlier this year, where easing of export controls allowed Nvidia to supply high-end chips to both the UAE and Saudi Arabia. These chips will power massive new data centres, including the UAE's multibillion-dollar Stargate project, led by tech firm G42. The initiative includes support from Cisco, Oracle, and Japan’s SoftBank.

The UAE is positioning itself as a hub for AI and data infrastructure, with 29 operational data centres through Khazna, a firm majority-owned by G42. The goal is clear: become the new “compute” capital, providing the processing power that underpins modern AI development.

Saudi Arabia is also advancing its efforts, launching a national AI company called Humain to build large-scale AI factories. Sovereign wealth funds are now shifting from passive investments to active roles in building homegrown tech ecosystems.

However, the region still faces hurdles. Attracting top-tier AI talent remains difficult, and the UAE’s small population limits its domestic research base. Incentives like golden visas and tax benefits aim to fill this gap.

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This pivot toward AI is also reshaping geopolitics. The UAE has reduced reliance on Chinese tech, aligning more with the US to secure strategic partnerships. As both economic and security alliances evolve, the Gulf sees AI as its next source of power — quite literally the new oil.