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Few middle AIUAEMGXAI AI AILLMGAI LLMAI AI EGUAE TSMC,UAEAIUAEuae DBCGAI UAE AIAI UAEAI GAI GYour browser does not support the element.powers have the towering technological ambitions of the rich Gulf states. As they seek to shift their economies away from fossil fuels, the Emiratis want to lead the world in artificial intelligence () and the Saudis want the kingdom to become home to startups in cutting-edge areas such as robotics. Those aspirations, however, are about to collide with geopolitical reality.The fascination with tech is not new, but the scale of the plans is. In Marchthe United Arab Emirates () created , a tech-investment company with a target size of $100bn, which will invest in infrastructure, such as data centres and chips. It has also set up a $10bn venture-capital fund. In Saudi Arabia a number of different funds with a combined firepower of $240bn will splurge on , data centres and advanced manufacturing. The rulers are making bets in three areas. One is model-making and applications. The Technology Innovation Institute, a research unit backed by Abu Dhabi, released Falcon, an impressive large language model (), in 2023. It is now working on new versions, as well as smaller models. Last year 42, an Emirati-backed firm, unveiled Nanda, a Hindi model, while the Saudi Data and Authority launched Allam, an Arabic . Mubadala, the main sovereign-wealth fund in Abu Dhabi, has invested in Anthropic, a top startup, among a string of other firms.The Gulf’s companies are also beefing up the region’s infrastructure. &, an Emirati telecoms company, will help to build part of a 45,000km-long subsea cable that makes its way around south Asia, Africa, the Mediterranean and Britain. A data-centre construction boom is under way, too, with the likes of Khazna, a unit of 42, and Damac, an Emirati property developer, building facilities.Gulf companies are building data centres abroad, too. Damac is a longstanding business partner of Donald Trump, helping him manage golf courses in the Middle East (Hussain Sajwani, its boss, is known as the “Donald of Dubai”). On January 8th Mr Trump said that Damac would invest at least $20bn in data centres in America. In August Mubadala invested in Yondr, a Los Angeles-based data-centre developer.A third area is chip manufacturing, which the seems especially keen on. Samsung, a South Korean electronics giant, and the world’s largest chipmaker, have held talks with officials to build plants in the . Sam Altman, the boss of Open, has convinced the ’s sheikhs, among other investors, to fund his chipmaking plans.There are early signs the strategy could come together. The total capacity of all data centres currently in construction in Saudi Arabia and the has grown about ten-fold in the past five years. Investment has flowed in. The Gulf recorded almost $8bn of foreign direct investment in tech infrastructure and another $2bn in software in 2024, up three-fold from 2017, according to fi Markets, a data firm. Talent is moving, too. , a consultancy, says that the talent pool in the and Saudi Arabia has grown by over one-third and almost a fifth, respectively, since 2022.But a big risk looms over the Gulf’s ambitions: souring relations between America and China. The rulers have leaned heavily on America’s big technology firms for partnerships. At the same time, they have struckplenty of deals with large Chinese firms, including Huawei, a tech company, and China Telecom, communications firm. Saudi Arabia has invested $400m in Zhipu , one of China’s most prominent companies. Moreover, the data-centre boom relies on China: about a third of imports of servers, chips and storage devices by Saudi Arabia and the come from the country. American policymakers are clearly wary of this relationship. Last year Cerebras Systems, an chipmaker that counts42 as its biggest customer and a minority investor, was forced to postpone its public offering reportedly because of America’s concerns about the Emirati firm’s links with China. And then on January 13th Joe Biden proposed tighter controls on American exports of leading-edge semiconductors. That would involve capping chip orders for countries that are not deemed allies—such as the Gulf states.The Gulf’s rulers may hope their close ties to big American tech firms will help insulate them from such machinations in Washington. Google, for instance, plans to set up an hub in Saudi Arabia. Microsoft has invested $1.5bn in 42. But ultimately they will face an uncomfortable choice. Geopolitical tensions are likely to intensify during Mr Trump’s second term. America’s tech giants already see themselves in a race with China. Brad Smith, Microsoft’s president, says that “the real key to American leadership from a long-term perspective is to put American technology around the world—and to do it faster than China does.” If the Gulf’s rulers want their tech dreams to materialise, they may eventually be forced to pick a side.
