Since the 1970s, the Gulf Cooperation Council (GCC) states have relied heavily on oil and fossil fuels as their primary sources of income to build and develop their countries. That dynamic is changing. A new form of power is emerging, centered on data, coding, and artificial intelligence (AI). The AI industry began accelerating in the GCC in early 2024, with countries like the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA), and Qatar now investing heavily in AI across multiple sectors, including energy, governance, smart cities, and finance, with ambitions to reach an estimated investment value of $227.1 billion by 2030.[i]
Many countries are racing to build AI infrastructure to ensure they can own and operate their own data centers and systems. For oil‑rich states such as the UAE, KSA, and Qatar, the strategic question is why invest so aggressively in a young and rapidly evolving industry. The answer lies in securing the future by gaining technological sovereignty, autonomy, and soft power.
Becoming an AI hub
This strategy is not solely about shifting away from fossil-fuel dependency. It is about securing a permanent seat in the global AI economy. These investments accelerated following the April visit of U.S. President Donald Trump to the GCC[ii], which marked a turning point in economic partnership and strategic alignment. Both the KSA and the UAE have emerged as top investors in AI, forming partnerships with major U.S. technology companies involved in semiconductor production, data centre development, and AI services.[iii]
In 2025, the KSA committed approximately $14.5 billion to the AI sector[iv], with plans to invest more than $40 billion and eventually reach $100 billion by 2030 as part of Crown Prince Mohammed bin Salman’s vision to build a digital, non‑oil economy.[v] In 2024, Saudi Arabia also launched its National Semiconductor Hub (NSH), aiming to establish 50 semiconductor companies in the kingdom.[vi]
The UAE, meanwhile, announced a dedicated $25 billion investment from its MGX fund[vii], focused specifically on AI data centres, connectivity, and semiconductor manufacturing, with some estimates indicating the fund could reach as high as $100 billion in value.[viii] MGX has invested in companies such as OpenAI, BlackRock, and NVIDIA.[ix] These partnerships grant the UAE access to cutting‑edge technology, top talent, and a seat at the table with technologically leading nations.
With these investments, the UAE and the KSA are building an alternative economy that positions them as global technology magnets rather than fossil-fuel exporters.
Qatar’s contribution is more modest but growing. The country has currently invested around $2 billion, with plans to reach $7 billion by 2030.[x] Other GCC members, such as Kuwait, Bahrain, and Oman, show lower investment levels, reflecting different geopolitical priorities focused more on domestic AI use rather than soft power projection.
Drawing in entrepreneurs and start‑ups
In addition to local investment, the GCC aims to become a global tech hub by attracting start-ups and entrepreneurial talent. Much of this comes through venture funding directed at early‑stage AI companies.
In the UAE, Polynome Venture Capital has earmarked $100 million to support 40 AI‑focused companies. State‑backed G42 continues to allocate funding to AI initiatives.[xi] In September, Presight announced a $100 million investment package targeting AI startups in Silicon Valley and beyond.[xii]
Abu Dhabi also signed a deal with NVIDIA to purchase 500,000 chips annually[xiii] – fueling data-centre growth and improving the country’s access to advanced AI hardware. The Presight–Sharouq fund[xiv] similarly allocated $100 million to companies working on machine learning and data-analytics solutions. Alongside these financial measures, the UAE offers a Golden Visa program targeting tech experts and founders[xv] – a tool to attract and retain global talent.
In the KSA, localization is key. Of the $14.9 billion committed in 2025, $10.9 billion is dedicated to infrastructure and start-up development through entities such as SDAIA and HUMAIN AI.[xvi] Foreign AI companies must partner with a Saudi entity to access funding[xvii] – reinforcing the country’s strategy of ensuring technology and expertise remain within the kingdom.
Qatar has earmarked $1 billion for investment funds benefiting both domestic and international companies. Through the Qatar Development Bank (QDB), start-ups may receive seed funding of up to $500,000 and scaling funds of up to $5 million.[xviii] Kuwait, Oman, and Bahrain are focusing primarily on domestic AI adoption.[xix][xx] The contrast of these investments reveals an emerging top three AI power states in the GCC, where the UAE, KSA and Qatar are effectively leveraging AI for regional and global soft power, whereas other smaller states are focusing on self-growth.
AI as a catalyst for soft power
Bloomberg reported that Taiwan Semiconductor Manufacturing Company (TSMC) is exploring building a multicomplex facility in the UAE. If completed, the UAE would become the only country in the region manufacturing AI hardware – a significant leap from consumer to supplier.[xxi] This shift would allow the UAE to export crucial AI components across the Middle East and even into Europe through GlobalFoundries.
The GCC’s strategy extends beyond building infrastructure – it is about shaping geopolitical influence. Companies like Presight are already exporting AI strategy frameworks abroad[xxii]; for example, the company signed an agreement with Azerbaijan to develop AI infrastructure in education and national policy. These moves signal an emerging digital diplomacy, where technology becomes a tool of soft power.
Balancing between Washington and Beijing
China’s growing influence in the Gulf, particularly in AI and cloud services, has raised concerns in Washington. Huawei and Dahua, both active in AI infrastructure, operate across several Gulf countries. As a result, KSA and the UAE are treading carefully, balancing partnerships with both China and the United States.
The Emirati firm G42 announced plans for the Stargate AI campus in partnership with NVIDIA, Cisco, Oracle, and SoftBank[xxiii], a massive 5‑gigawatt facility. However, the project is conditioned on G42 limiting its engagement with Chinese firms, following U.S. pressure. Reuters reported that while Huawei previously supplied G42 with data-centre equipment[xxiv], the project is still under review due to U.S. security concerns.[xxv]
Saudi Arabia’s semiconductor firm ALAT has also signalled willingness to divest from Chinese suppliers[xxvi] if required to maintain partnerships with U.S. firms such as NVIDIA.
Nevertheless, Alibaba clouds still operate in the KSA to feed domestic needs through a joint venture with the Saudi Cloud Computing Company.[xxvii]
Other Gulf states follow a similar balancing act — offering space to both Chinese and U.S. players while ensuring their market remains competitive and strategically flexible.[xxviii]
If this power balance practice is sustained, the Gulf states, and mainly the KSA and the UAE, would guarantee their position powerful players in the AI field of the Middle East through offering a flexible yet cautious market to global strategic actors. These initiatives aimed at harmonizing global powers will keep both countries attractive for the largest tech countries like the U.S and China.
Conclusion
The GCC’s AI investments represent far more than economic diversification. They signal a redefinition of soft power, geopolitical independence, and state modernization. By investing billions into data centres, semiconductors, talent attraction, and global partnerships — all while balancing relations between the U.S. and China — the GCC is positioning itself as a global technology player.
These countries are not simply transitioning away from oil — they are building a new form of political influence rooted in data, computation, and digital infrastructure. AI is their pathway to strategic sovereignty.
In the decades ahead, GCC countries aim to shape global decision‑making not through fossil fuels, but through technology.
[i] PWC (2025). ‘US$320 billion by 2030?’, retrieved from: https://www.pwc.com/m1/en/publications/potential-impact-artificial-intelligence-middle-east.html.
[ii] Ebrahim, N. and Al LAwati, A. (2025). ‘Trump is visiting three of the world’s richest nations. Here’s what’s on their wish list’, CNN World, 12 May 2025, retrieved from: https://edition.cnn.com/2025/05/11/middleeast/trump-visit-gulf-arab-states-saudi-uae-qatar-intl.
[iii] Dent, E. (2025). ‘Unpacking Trump’s 2025 Gulf Investment Tour’, The Washington Institute for Near East Policy, 25 June 2025, retrieved from: https://www.washingtoninstitute.org/policy-analysis/unpacking-trumps-2025-gulf-investment-tour.
[iv] Nouri, M. (2025). ‘Saudi Arabia unveils multi-billion-dollar investment in AI’, CFI Group, 10 February 2025, retrieved from: https://cfi.trade/en/blog/mena/saudi-arabia-unveils-multi-billion-dollar-investments-in-ai.
[v] Al-Barakati, M. (2024). ‘Saudi Arabia launches “National Semiconductor Hub” to drive industry localization’, Arab News, retrieved from: https://www.arabnews.com/node/2524301/business-economy.
[vi] Ibid.
[vii] Ibid.
[viii] Fast Company Middle East (2024). ‘Abu Dhabi unveils AI investment firm, aims $100 billion AUM’, 24 December 2024, retrieved from: https://fastcompanyme.com/news/abu-dhabi-unveils-ai-investment-firm-aims-100-billion-aum/#:~:text=The%20firm’s%20investments%20will%20be%20concentrated%20in%20three%20key%20areas,%2C%20life%20sciences%2C%20and%20robotics.
[ix] Global Infrastructure Partners (2025). ‘AI Infrastructure Partnership (AIP), MGX, and Blackrock’s Global Infrastructure Partners (GIP) to Acquire All Equity in Aligned Data Centers’, 15 October 2025, retrieved from: https://www.global-infra.com/news/ai-infrastructure-partnership-aip-mgx-and-blackrocks-global-infrastructure-partners-gip-to-acquire-all-equity-in-aligned-data-centers/#:~:text=With%20this%20investment%20in%20Aligned,to%20participate%20in%20its%20growth.%E2%80%9D.
[x] Arcibal, C. (2025). ‘Qatari fund invests US$2 million in AI start-up Nexx, backed by Hong Kong’s wealthiest man’, 11 September 2025, retrieved from: https://www.scmp.com/business/companies/article/3325067/qatari-fund-invests-us2-million-ai-start-nexx-backed-hong-kongs-wealthiest-man.
[xi] Emmanuel, J. (2024). ‘Dubai-Based Polynome Group Unveils $100M Fund To Support UAE’s AI Startups’, Forbes Middle East, 12 June 2024, retrieved from: https://www.forbesmiddleeast.com/innovation/startups/dubai-based-polynome-group-unveils-%24100m-fund-to-support-uaes-ai-startups.
[xii] Presight (2025). ‘Presight and Shorooq launch a $100M global fund to accelerate AI innovation’, 23 September 2025, retrieved from: https://www.presight.ai/news/presight-and-shorooq-launch-a-100m-global-fund-to-accelerate-ai-innovation/.
[xiii] Reuters (2025). ‘US approves some Nvidia UAE sales, Bloomberg News reports’, 9 October 2025, retrieved from: https://www.reuters.com/technology/us-approves-some-nvidia-uae-sales-bloomberg-news-reports-2025-10-09/.
[xiv] G42 (2025). ‘Presight and Shorooq Launch a $100M Global Fund to Accelerate AI Innovation’, 23 September 2025, retrieved from: https://www.g42.ai/resources/news/presight-and-shorooq-launch-100m-global-fund-accelerate-ai-innovation.
[xv] U.AE (2025). ‘Golden Visa’, retrieved from: https://u.ae/en/information-and-services/visa-and-emirates-id/residence-visas/golden-visa#:~:text=competent%20local%20entity.-,Entrepreneurs,from%20each%20of%20the%20following%3A.
[xvi] Riyadh Region Municipality (2025). ‘Investment’, retrieved from: https://www.alriyadh.gov.sa/en/content/investment.
[xvii] Ibid.
[xviii] QDB (2025). ‘Startup Qatar Investment Program’, retrieved from: https://www.qdb.qa/Financing-And-Funding/Equity-And-Investment/Startup-Qatar-Investment-Program.
[xix] Government of Kuwait (2025). ‘Kuwait National AI Strategy: 2025-2028’, retrieved from: https://cait.gov.kw/media/filer_public/3f/b4/3fb49a45-4a78-4489-8898-b68e2bd260ca/kuwait_national_strategy.pdf.
[xx] Saba, Y. (2025). ‘Bahrain’s sovereign fund, SandboxAQ sign deal to speed up drug discovery with AI’, Reuters, 27 October 2025, retrieved from: https://www.reuters.com/business/healthcare-pharmaceuticals/bahrains-sovereign-fund-sandboxaq-sign-deal-speed-up-drug-discovery-with-ai-2025-10-27/.
[xxi] Combs, C. and Fitzgerald, K. (2025). ‘UAE-backed GlobalFoundries plans $16bn investment to expand US semiconductor manufacturing’, The National, 4 June 2025, retrieved from: https://www.thenationalnews.com/future/technology/2025/06/04/globalfoundries-investment-semiconductor-manufacturing/#:~:text=UAE%2Dbacked%20GlobalFoundries%20plans%20%2416,in%20New%20York%20and%20Vermont.
[xxii] Presight (2025). ‘Presight and Azerbaijan Sign Strategic Agreements to Advance National AI Strategy’, 19 September 2025, retrieved from: https://www.presight.ai/news/presight-and-azerbaijan-sign-strategic-agreements-to-advance-national-ai-strategy/.
[xxiii] OpenAI (2025). ‘Announcing The Strargate Project’, 21 January 2025, retrieved from: https://openai.com/index/announcing-the-stargate-project/.
[xxiv] Maccioni, F. (2025). ‘First 200 MW from UAE’s Stargate AI campus to come online next year’, Reuters, 14 October 2025, retrieved from: https://www.reuters.com/business/media-telecom/first-200-mw-uaes-stargate-ai-campus-come-online-next-year-2025-10-14/.
[xxv] Al Habtoor Research Centre (2025). ‘The Future Role of China in the GCC’s Tech Transition’, 20 October 2025, retrieved from: https://www.habtoorresearch.com/programmes/the-future-role-china-gcc/#:~:text=U.S.%20tech%20companies%2C%20like%20Google,ground%20in%20the%20region%20lately.
[xxvi] Evertiq (2024). ‘Saudi chip fund will pull back from China if US demands it’, 10 May 2024, retrieved from: https://evertiq.com/news/55703.
[xxvii] El Kadi, T.H. (2025). ‘Local Agency Is Shaping China’s Digital Footprint in the Gulf’, Carnegie Endowment, 6 January 2025, retrieved from: https://carnegieendowment.org/posts/2025/01/local-agency-is-shaping-chinas-digital-footprint-in-the-gulf?lang=en.
[xxviii] Belbagi, Z.M. (2024). ‘Gulf states balance China, US collaborations in AI space’, Arab News, 17 April 2024, retrieved from: https://www.arabnews.com/node/2494616/amp.
