In the twentieth century, the Gulf’s strategic relevance was distilled into a simple equation: oil in exchange for global influence and security guarantees. Today, that formula is being rewritten. The new commodity is not a liquid drawn from beneath the desert sands, but processing power ~ “compute” ~ driven by the most advanced chips and housed in sprawling data centres. The Gulf’s leaders have decided that if oil once powered the industrial economy, compute will fuel the digital one. The United Arab Emirates and Saudi Arabia are now deploying their considerable sovereign wealth to buy a place at the top of the artificial intelligence value chain.
Their approach is both straightforward and bold: build the infrastructure that global AI needs, partner with the most advanced technology providers, and make themselves indispensable to the world’s AI ambitions. In the UAE, this ambition has taken physical form in the Stargate project, a colossal data infrastructure cluster designed to host AI training at scale. Such facilities, equipped with cutting-edge chips, are essential for developing and running frontier AI models.
They are also in short supply globally. By positioning themselves as hosts of this critical infrastructure, Gulf states are creating a new kind of leverage, much as oil pipelines once did. Saudi Arabia is taking a similar route with its national AI company and plans for “AI factories” stocked with hundreds of thousands of high-end chips. These are not vanity projects. In a future where data, algorithms, and computing capacity determine technological and economic advantage, to own the infrastructure is to own a strategic resource.
The timing is deliberate. The United States and China are locked in a contest for AI supremacy, and the Gulf has become a coveted partner. Aligning with the US, the Gulf states gain access to its technological ecosystem and political goodwill ~ at the cost of scaling back certain Chinese-backed projects. For Washington, bringing the Gulf into its AI “stack” consolidates its global reach while keeping valuable infrastructure out of Beijing’s hands. Yet there are headwinds. AI infrastructure is only as valuable as the talent and innovation it attracts, and the Gulf’s small populations limit the dep th of its homegrown research base.
Golden visas, tax incentives, and regulatory flexibility may help draw in global talent, but building an enduring ecosystem will take more than imported expertise ~ it will require a cultural and educational transformation. The stakes are high. If the Gulf succeeds, it could transition from an energy exporter to a digital-era powerhouse, offering the world compute capacity instead of crude oil. If it falters, these billion-dollar facilities could become under-utilised monuments to ambition without capability. For now, the Gulf’s leaders are betting that in the twenty-first century, the flow of electrons will matter as much as the flow of petroleum. If they are right, they are not just hedging against the end of oil ~ they are laying the foundations for their next century of relevance.