nisar ahmed 
A fierce rivalry is unfolding in the Middle East as Saudi Arabia and the United Arab Emirates (UAE) compete for dominance in artificial intelligence (AI), each determined to become the region’s leading tech powerhouse. Backed by massive investments, strategic partnerships with U.S. tech giants, and ambitious infrastructure projects, both nations are positioning AI at the heart of their long-term economic visions.
AI as a New Economic Engine
Both countries are racing to reduce their reliance on oil revenues, with AI seen as a cornerstone of economic diversification. Saudi Arabia’s Vision 2030 identifies data and AI as central to its economic transformation, with 70% of its strategic objectives tied to these technologies, according to the Saudi Data and AI Authority.
The UAE, an early mover in the region, appointed a Minister of State for Artificial Intelligence in 2017 and established the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), which recently expanded its reach with a new AI lab in Silicon Valley.
While the UAE initially led with its aggressive AI initiatives, Saudi Arabia has surged forward with a string of high-profile investments and state-backed programs that are reshaping the regional landscape.
Saudi Arabia’s AI Spending Spree
In 2025 alone, Saudi Arabia has announced a series of landmark deals:
Humain, a PIF-backed AI firm, is preparing a $10 billion venture capital fund.
Google Cloud and the Public Investment Fund (PIF) are jointly investing $10 billion to build an AI hub in Saudi Arabia.
AWS and Humain have committed $5 billion to develop a dedicated “AI Zone” in the kingdom, supplementing AWS’s earlier $5.3 billion investment to establish Saudi Arabia as a new AWS region.
Oracle unveiled a $14 billion, 10-year plan to expand cloud and AI infrastructure in the country.
Equinix is constructing a $1 billion data center to handle growing demand for AI and cloud computing services.
The UAE’s Expanding AI Portfolio
The UAE continues to aggressively pursue AI leadership with several bold initiatives:
MGX, an AI-focused investment firm backed by Mubadala and G42, plans to invest $100 billion into AI chips, infrastructure, and core technologies. MGX is also involved in Stargate, OpenAI’s $500 million data center project.
Stargate UAE, a collaborative project between OpenAI, G42, Oracle, Nvidia, and SoftBank, will build a 1-gigawatt data center hub, with 200 megawatts coming online by 2026.
Abu Dhabi has committed $3.54 billion to fully automate its government operations as part of the Abu Dhabi Government Digital Strategy for 2025-2027.
A Regional Contest with Global Implications
The Saudi-UAE AI race unfolds amid broader global competition between the U.S. and China for AI supremacy. The Biden-era export restrictions on advanced chips had threatened Middle Eastern AI ambitions, but former President Trump, in a diplomatic move, reportedly lifted these curbs to keep the Gulf aligned with U.S. technology rather than drifting toward China.
AI supremacy requires enormous computing power, which in turn demands vast, energy-intensive data centers. Both nations are building aggressively. As of early 2025, Saudi Arabia boasts more than 300 megawatts of data center capacity, slightly ahead of the UAE’s 250 megawatts, according to ResearchAndMarkets.com. However, Saudi Arabia’s pipeline dwarfs that of its neighbor, with an additional 2,200 megawatts planned compared to the UAE’s 500 megawatts.
The Broader Middle East AI Landscape
According to the International Institute for Strategic Studies (IISS), Israel currently leads Middle Eastern AI readiness, followed by the UAE and Saudi Arabia. Qatar, Oman, and Bahrain trail behind, while other nations lag considerably.
Data centers play a crucial role in this emerging landscape. “With about $5 trillion in sovereign wealth, the Gulf states have the financial means to become serious contenders in AI and data centers,” IISS researchers Laith Alajlouni and Jasim Murad noted.
Challenges Ahead
Despite massive financial commitments, both Saudi Arabia and the UAE face formidable hurdles. Neither has yet developed a frontier AI model rivaling OpenAI’s GPT-4 or China’s DeepSeek. Both nations struggle with limited pools of highly skilled AI talent, and building sustainable innovation ecosystems will require time, education, and regulatory evolution.
What is clear, however, is that the global AI race is no longer confined to Silicon Valley and Shenzhen. Increasingly, its future is being shaped from Riyadh and Abu Dhabi — turning the Persian Gulf into one of the world’s most dynamic proving grounds for AI dominance.
