When Donald Trump arrived in the United Arab Emirates earlier this year, the spotlight wasn’t only on the diplomatic reception — it was on a major AI announcement.
The centerpiece of the visit was the launch of a massive joint US-UAE artificial intelligence campus, touted as the largest AI infrastructure hub outside the United States. This marked the Gulf’s most assertive step yet toward positioning itself as a global leader in AI development.
Coinciding with Trump’s trip, the US relaxed export controls on cutting-edge Nvidia chips to the UAE and Saudi Arabia — a clear signal that Washington sees its Gulf allies as key players in a broader tech alliance.
With an eye on reducing reliance on fossil fuel revenue, the Gulf states are using their wealth, energy resources, and strategic geography to invest heavily in AI. For them, the next frontier of economic influence lies in data and compute — the vast processing power needed to train large AI models.
The UAE is spearheading these efforts. Its capital, Abu Dhabi, recently unveiled plans for a new data center cluster — part of the “Stargate” initiative — which will serve as a regional AI engine. The project is being led by state-linked tech firm G42, and Nvidia will provide high-end chips. Tech giants like Oracle, Cisco, and Japan’s SoftBank are also involved in developing the project’s first phase.
Hassan Alnaqbi, CEO of Khazna (the UAE’s largest data center company, majority-owned by G42), likens this transformation to the country’s rise in global aviation. “Just as Emirates Airlines made the UAE a global air travel hub, this is our opportunity to lead in AI and data infrastructure,” he said. Khazna operates 29 facilities across the country and is responsible for building out the Stargate infrastructure.
The Gulf nations see hosting AI data centers as essential to their long-term strategy. “Compute is the new oil,” says Mohammed Soliman of the Middle East Institute in Washington, referring to the processing power that fuels artificial intelligence. Like oil in the 20th century, compute could become the defining economic resource of the digital age.
Where Gulf sovereign funds once poured billions into tech giants abroad, they are now shifting toward domestic development. Saudi Arabia’s Public Investment Fund has launched “Humain,” a national AI firm planning to build massive compute facilities powered by hundreds of thousands of Nvidia chips. In the UAE, Mubadala — another sovereign fund — is backing G42 and MFX, a $100 billion AI-focused venture that includes Microsoft as a technology partner.
However, while the region is racing ahead on infrastructure, it still faces hurdles in building top-tier talent. With a relatively small population and limited homegrown research capacity, the UAE is offering golden visas, tax incentives, and streamlined regulations to attract global AI experts.
“World-class infrastructure will attract world-class people,” says Baghdad Gherras, founder of a UAE-based AI startup. Yet the region has yet to produce a globally recognized AI leader like OpenAI or Mistral.
Trump’s visit to the UAE also signaled a shift in the US-Gulf relationship. Where once oil and security dominated the agenda, technology — particularly AI — is now a pillar of strategic alignment. As part of this pivot, the UAE has scaled back some China-backed initiatives and begun distancing itself from Huawei infrastructure.
“The recent AI deals are less about the Gulf and more about countering China,” says Soliman. “The US is bringing the Gulf into its AI ecosystem — Team America AI.”
This ecosystem — often referred to as the “AI stack” — includes everything from microchips and data centers to large language models and software, with American firms leading in most areas. Gherras says the UAE’s alignment with the US is logical. “The Americans are currently ahead. Betting on them just made sense,” he said.
Despite that, the Stargate project is still undergoing US security review due to concerns over potential Chinese involvement. Yet, it is expected to proceed with strong backing from US firms.
While the US remains in the AI lead for now, Soliman warns that China is moving fast. “They’re scaling rapidly. Their AI tools may not match America’s in power, but they’re more affordable — and often, ‘good enough’ is all a country needs.”
For now, the partnership serves both sides: the Gulf gets an ally in its transition away from oil dependency, while the US gains valuable partners in its ongoing tech rivalry with China.
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