What Oil Monarchies Can Bring to the AI Table

U.S. President Donald Trump visits the mosque at the Abrahamic Family House, an interfaith complex in Abu Dhabi. (Brendan Smialowski / AFP / Getty Images)

The Persian Gulf monarchies aren’t traditionally known for moving fast and breaking things, at least in the advanced technology sphere. That may change.

A May visit from U.S. President Donald Trump put the oil-rich region on the map for the global artificial-intelligence frenzy, with typically exorbitant numbers flying about. The United Arab Emirates, home to the burgeoning commercial/financial centers of Dubai and Abu Dhabi, targeted $500 billion for its own Stargate AI complex, on top of promising $1.4 trillion in U.S. investments.

Policy followed pledges, sort of, a few weeks ago, as the U.S. Commerce Department reportedly cleared the export of 500,000 cutting-edge Nvidia microchips to the U.A.E., formerly blocked on national security grounds.

A familiar cast of Silicon Valley/Wall Street A-listers cheered from the sidelines. The U.A.E.’s leap forward would be rooted in “democratic values, open markets, and trusted partnerships,” OpenAI enthused in a statement. Private-equity power Blackstone signed a $3 billion deal Oct. 28 with newly minted Saudi Arabian state vehicle Humain to build data centers in the Kingdom.

What could go wrong?

The U.A.E. and Saudi can boast some comparative advantage in the competition for data centers: cheap energy, deep capital pockets, and “stable” governments that don’t need to worry about environmental or community pushback.

“That’s a relatively compelling combination,” says Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute.

The U.A.E., which jumped far ahead of its larger neighbor by appointing the world’s first AI minister in 2017, showed some nerd chops in September: Researchers from its AI University released K2 Think, a well-received budget alternative to ChatGPT.

The political moment is ripe, too, says Matt Gertken, geopolitical strategist at BCA Research. The Trump administration’s drive to lock the world into the U.S. “AI stack” is eroding concerns that cutting-edge chips might leak to China or other adversaries. Neighboring Iran’s capacity for mischief looks severely weakened by Israeli-U.S. attacks this summer. “There’s a great geopolitical backdrop for the U.S. and Arab Gulf states to work together,” Gertken says.

Middle East geography could prove a benefit for once, as emphasis shifts to the Middle part. The Gulf is “within a 2,000-mile radius of half the world’s population,” OpenAI’s release points out. U.A.E. and Saudi data centers may prove particularly well placed to meet demand from crowded, energy-strapped India, Gertken notes.

Still, “the ambitious bilateral agreements that emerged around Trump’s trip have not progressed as quickly as anticipated,” Mogielnicki says. Leaked details indicate that those Nvidia superchips will only be entrusted to U.S. companies, like Oracle, working in the U.A.E. The Emiratis and Saudis are pushing for direct sales. “I see this Nvidia approval as a test case,” says Simon Henderson, director of Gulf and energy policy at the Washington Institute.

It’s unclear, in the best case, whether stand-alone data centers can pay for themselves without the “upstream” software and services that seem destined to be controlled from California, Gertken says. “There will probably be a huge gap in profit compared with the cost of construction,” he predicts.

Security threats aren’t exactly a thing of the past in the Gulf either, Henderson adds. “Why would you build a very expensive facility that could be a pile of rubble tomorrow?” he asks rhetorically.

That isn’t the kind of risk that the high-rollers of Big Tech are used to.

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