AI News Monitor

Saudi Arabia and the United Arab Emirates (UAE) are locked in an intensifying competition to establish themselves as the Middle East’s premier artificial intelligence (AI) hub, pouring billions into data centers, partnerships with U.S. tech giants, and ambitious national strategies aimed at reducing their reliance on oil.

The rivalry reflects a broader push by Gulf nations to harness AI as an engine of economic transformation. Saudi Arabia’s Vision 2030 plan identifies AI as critical to its future, with 70% of its strategic goals tied to data and AI, according to the Saudi Data and AI Authority. Meanwhile, the UAE, which appointed the world’s first AI minister in 2017, has launched an AI university and is opening a Silicon Valley research lab.

Billions in Investments
Saudi Arabia has surged ahead in recent months with a flurry of investments. During President Trump’s visit in May, the kingdom announced a $10 billion AI venture capital fund through its Public Investment Fund (PIF). Tech giants like Google Cloud, Amazon Web Services (AWS), and Oracle have pledged billions to build AI hubs and data centers, with Saudi Arabia’s upcoming data center capacity reaching 2,200 megawatts—far outpacing the UAE’s 500 megawatts in planned projects.

The UAE, however, is not standing still. Abu Dhabi’s MGX, a state-backed AI investment firm, aims to deploy $100 billion in AI infrastructure, including a stake in OpenAI’s $500 million “Stargate” data center project. The UAE also plans to automate all government services by 2027 under a $3.54 billion digital strategy.

Geopolitical Stakes
The competition unfolds against a backdrop of U.S.-China tensions over AI supremacy. The Trump administration has sought to keep Gulf nations aligned with American tech, lifting chip restrictions in a diplomatic gesture during the president’s visit.

Yet challenges remain. Neither Saudi Arabia nor the UAE has developed a cutting-edge AI model to rival OpenAI or China’s DeepSeek, and both face shortages of skilled talent. Still, with vast sovereign wealth funds and cheap energy, analysts say the Gulf states are positioning themselves as serious contenders in the global AI race.

“The battle for AI leadership is no longer confined to Silicon Valley,” said Laith Alajlouni of the International Institute for Strategic Studies. “Riyadh and Abu Dhabi are now key players shaping its future.”

As the two nations accelerate their efforts, the question is no longer if the Middle East will become an AI powerhouse—but which country will lead it.