When Donald Trump landed in the United Arab Emirates earlier this year, he wasn’t just bringing headlines with him—he came with deals, ambitions, and soft power in the field of artificial intelligence.
The former US president was received with royal honors, but the highlight of the visit was the announcement of a massive AI-focused university campus—a joint UAE-US project.
This initiative, described as the largest AI infrastructure hub outside the US, marks the boldest step yet by Gulf countries to cement their position on the global AI map.
Trump’s visit coincided with a strategic shift as the White House relaxed export restrictions on Nvidia’s most advanced chips to both the UAE and Saudi Arabia.
This move signaled how seriously the US considers its Gulf allies as partners in a broader tech alliance.
Gulf states are leveraging their sovereign wealth, geographic location, and abundant oil reserves to position themselves as AI powerhouses. Technology has become central to their plans for reducing future dependence on fossil fuel revenues.
The UAE leads this charge with bold steps, placing data centers at the heart of its strategy. Abu Dhabi announced the development of a massive data center cluster dedicated to OpenAI and other American firms under the “Stargate” project.
This multi-billion-dollar deal is funded by G42, a state-linked Emirati tech firm spearheading the country’s AI ambitions. Nvidia will supply its latest advanced chips for the project.
Major tech firms such as Cisco, Oracle, and Japan’s SoftBank are collaborating with G42 in the first phase of development.
Hassan Alnaqbi, CEO of Khazna—the UAE’s largest data center operator—says: “Just like Emirates Airlines turned the UAE into a global air travel hub, the country can now become a global hub for AI and data.”
Khazna, majority-owned by G42, is building the infrastructure for the Stargate project and currently operates 29 data centers across the UAE.
Both the UAE and Saudi Arabia are racing to host the computing infrastructure needed to train powerful AI models. “Compute is the new oil,” says Mohamed Soliman, senior fellow at the Middle East Institute in Washington, D.C.
In AI terms, “compute” refers to the massive processing power provided by advanced chips and large-scale data centers—an area into which the Gulf is investing billions.
In today’s AI-driven world, infrastructure is the new fuel—just as oil powered the industrial revolution.
Soliman notes that Gulf AI firms today aspire to play a role similar to that of their oil counterparts in powering the global economy—but this time through compute.
In recent years, Gulf sovereign wealth funds have poured billions into foreign tech companies. But now, they are shifting from passive investors to active players.
In Saudi Arabia, the Public Investment Fund (PIF) has launched a national AI firm called “Humain,” which plans to build “AI factories” powered by hundreds of thousands of Nvidia chips over the next five years.
In the UAE, sovereign wealth fund Mubadala has backed G42 and the $100 billion joint venture “MGX,” which focuses on AI and includes Microsoft as a key technology partner—alongside other domestic initiatives.
However, attracting top-tier AI talent remains a major hurdle. To address this, the UAE is offering incentives like low taxes, long-term golden visas, and a flexible regulatory environment to lure companies and researchers.
“Building world-class AI and digital infrastructure will act as a magnet for talent,” says Baghdad Gras, an AI startup founder and venture capitalist based in the UAE.
Still, the region has yet to produce a globally recognized AI company like OpenAI, Mistral, or DeepSeek, nor does it have a deep bench of elite research talent.
Gras notes that the UAE’s small population—around 10 million—limits the scale of a domestic research ecosystem.
The Gulf’s rise as an ambitious AI player has also drawn the region into the spotlight of US-China tech rivalry.
Trump’s visit gave Washington an edge in the regional AI race—but at a cost. In shifting course, the UAE scaled back some Chinese-backed projects and reduced its reliance on Huawei hardware.
The AI-focused deals during Trump’s trip reflect the growing strategic importance of this technology in US diplomacy.
For decades, the US-Gulf relationship was built on the formula of “oil for security.” Today, that dynamic is evolving into a mix of energy, security, and technology.
Soliman of the Middle East Institute says the AI agreements signed during Trump’s visit “are more about China than the Gulf.”
“It’s essentially an attempt to pull a promising AI region—the Gulf—into the American AI ecosystem and make it part of Team America,” he adds.
The “AI stack” refers to the full chain of capabilities, including chips, infrastructure, models, and software—areas dominated by US firms.
Gras says the UAE’s choice to partner with the US over China was a rational one: “At this point, the Americans are ahead in AI. So it made sense for the UAE to bet on them.”
Still, Reuters reported that the Stargate deal is awaiting security approvals, with US officials still concerned about potential Chinese components or personnel in Emirati data centers.
Even so, the project is expected to proceed with growing US corporate support.
Despite America’s current AI dominance, Soliman cautions against underestimating China.
“The Chinese are moving fast. They already have an AI stack. It may not be as powerful as the American one, but it’s cheaper. And for many countries, ‘good enough’ is all they need.”
For now, both the US and Gulf states appear to be benefiting: Washington gains regional allies in its AI race against China, while the Gulf gains a powerful partner in its search for a post-oil economic future.
