Will ‘massive' Gulf deals cement the US lead in the race for global AI dominance?

Egypt Independent

27-05-2025

CNN —
US President Donald Trump's whirlwind visit last week to the Middle East saw a wave of AI dealmaking that could reshape the global technology landscape.
On May 12, Saudi Arabia's sovereign wealth fund Public Investment Fund announced the establishment of AI startup Humain. US companies Nvidia, AMD, and Qualcomm also announced deals to supply chips and partner on AI infrastructure with Humain.
The Trump administration also announced that it would rescind and replace the 'AI Diffusion' rule, a Biden-era regulation capping sales of the most advanced chips that was set to take effect on May 15.
On the final leg of the tour, the US and the United Arab Emirates (UAE) announced that they will partner to build a data center complex in Abu Dhabi with 5-gigawatts of capacity – the largest data center cluster outside of the US, according to the Commerce Department. By comparison, the current global market capacity of data centers is approximately 59 gigawatts – according to Goldman Sachs.
The Trump administration said that it also secured Saudi and UAE investment for data centers located in the US.
In Abu Dhabi, Trump said that the countries had 'agreed to create a path for the UAE to buy some of the world's most advanced AI semiconductors from American companies.'
The deals, and new partnerships, could reshape the global AI landscape in myriad ways, according to officials and experts.
'We're still waiting for the full details to emerge, but the scale of some of these announced projects is massive,' says Sam Winter-Levy, a fellow at the Carnegie Endowment for International Peace, whose focus is technology and international affairs.
Trump attends a business meeting and roundtable at Qasr Al Watan, in Abu Dhabi, United Arab Emirates, on Friday, May 16, 2025.
Altaf Qadri/AP
A 'game-changer' for the global AI race
In recent years, Beijing and Washington have been vying for supremacy in AI technology that could confer the winner advantages in economic productivity, scientific breakthroughs and national security.
Trump's AI czar David Sacks said in a post on X that the deals are a 'game-changer in the global AI race' that will 'help to cement American technology as the global standard – before our competitors can catch up.'
Some experts agree that working with the Middle East will fill gaps in current US capabilities. AI models require vast amounts of computing power, commonly referred to simply as 'compute,' to train and run. That requires huge amounts of energy.
'We have a huge problem when it comes to fueling our own data center infrastructure in the US,' Mohammed Soliman, a senior fellow at the Middle East Institute think-tank in Washington-DC, tells CNN.
Men use their phones during the Saudi-US Investment Forum, in Riyadh, Saudi Arabia, May 13, 2025.
Brian Snyder/Reuters
Growing demand for energy to power data centers has strained parts of the US grid. Although some say the issue can be resolved domestically, others say partnering with the oil-rich Gulf is a wise strategic bet.
'There's not really an immediate [domestic] solution,' Soliman adds, 'You need to invest heavily in energy infrastructure, and that takes capital, land, a lot of resources, and time.'
But some are concerned about how the flow of chips to the Gulf will be controlled. On May 19, leading Democrats warned in a letter that 'the deals – without any clear and enforceable protections to stop this sensitive technology from falling into China's hands – present an immediate national security threat.'
If chips are given directly to Saudi and Emirati companies, without the right safeguards, it could present national security risks, and the nations could employ them for tasks like autonomous weapons research and development, says Winter-Levy.
In another possible scenario, in which the data centers might be controlled and operated by US tech companies, he says the risks are more limited.
The UAE and Saudi Arabia both have ambitious plans to build AI industries to prepare their economies for a post-oil future.
US authorities say that not working with the Gulf could have increased the risks of a Gulf-China AI alliance. The chip technology of companies like Huawei is quickly advancing. 'If we reject them, we will drive them into China's arms,' said Sacks' X post.
US President Donald Trump, Saudi Crown Prince Mohammed Bin Salman and others listen during a Saudi-US investment forum at the King Abdul Aziz International Conference Center on May 13, 2025, in Riyadh, Saudi Arabia.
Brendan Smialowski/AFP/Getty Images
Advancing Gulf AI ambitions
While much is still unknown, one thing is clear: The Gulf's role in the global AI landscape is growing.
'This could well see the emergence of the Gulf as the third-biggest power in the AI competition,' says Winter-Levy. 'If the countries use the chips to train their own frontier models, the Gulf could move closer to competing with the US on the technology.'
He adds that current talent constraints might hold the region back from competing with current AI leaders US and China.
Experts say the deals mark a new era in US-Gulf relations. 'This is going to be a pivotal moment for the way the US-Gulf relationship is defined,' says Soliman. 'It's no longer about crude; it's mostly about compute.'
In the Democrats' letter, they urged the administration to make sure 'American technology prioritizes the buildout of this critical industry here at home, not abroad.'
But if a situation emerges in the future where a significant amount of US computing power is in the region, said Winter-Levy, it could give Gulf governments 'some significant degree of leverage, both over US tech companies but also over US foreign policy more generally.'