Today's Edition
NOOR AL MAZROUEI*
With boundless ambition aligned with their national capabilities and strategies, the Arab Gulf states are emerging as powerful players capable of solidifying their position as leading regional hubs for artificial intelligence (AI). This stems from their faith in technological progress, recognition of AI’s importance in shaping the global economy, commitment to keeping pace with rapid transformations, and adoption of a digital economy.
The Gulf states are making major strides in developing and localising the AI sector. They stand out for their openness to AI compared to many other regions of the world. However, no country can become a significant force in AI without owning data centres - for reasons related to the ease and speed of service delivery to clients, as well as geopolitical and sovereignty considerations, since the data stored on servers must be subject to local regulatory frameworks.
Data centres house the computing infrastructure - such as servers, data storage engines, and networking equipment. Their importance lies in their role as vast digital analysers that read between the lines, interpret, interlink, and correlate massive datasets to build highly complex relationships. These centres are essential for developing and operating AI systems, and their establishment and expansion generate employment opportunities and increase local productivity.
The UAE, Saudi Arabia, and Qatar have taken tangible steps to mobilise capabilities and expand their influence in AI through research and development - establishing specialised universities and research centres, investing in talent, providing attractive environments for experts and innovators, partnering with global technology giants, and developing advanced digital infrastructure. These efforts stem from the belief that technology - particularly AI - is a vital tool for economic diversification and the development of new industries capable of shaping human progress.
The Gulf region is an ideal arena for AI technologies, given their diverse applications in security, education, healthcare, and the economy, as well as the region’s strong foundations in financing, advanced infrastructure, and flexible regulatory environments that encourage creativity.
Consequently, major global powers in AI have formed partnerships with Gulf countries, recognising them as regional centres for AI technology - partnerships that serve the economic interests of all parties. According to PwC, AI is expected to contribute around $320 billion to the Middle East’s economy by 2030.
The rapid growth of AI, however, is closely linked to its high potential for energy consumption. It is anticipated that energy demand will double due to AI and data centres operations. The Gulf states, endowed with both traditional and renewable energy resources, are uniquely positioned to meet this demand. Their ability to supply energy - especially renewable energy - at competitive prices offers an opportunity to combine sustainability and power efficiency with the computational strength required by AI, opening the door to numerous opportunities.
It goes without saying that the Gulf states - particularly the UAE, Saudi Arabia, and Qatar - possess substantial investment capital to channel into data centres. Their geographic location, bridging Asia, Europe, and Africa, gives them significant logistical advantages as a distribution platform for technology. The availability of energy and advanced communications infrastructure enables the establishment of massive data centres that serve companies both regionally and globally. Indeed, the Gulf countries have formed strategic alliances with Microsoft, NVIDIA, and OpenAI, in addition to Chinese and European companies, to lead the region’s digital transformation.
In addition to developing AI models, the UAE possesses 235 megawatts of data centre capacity, while Saudi Arabia has 123 megawatts as of the end of 2023. Since then, partnerships and deals have expanded to build new AI centres. In 2024, the UAE added 64 megawatts and announced plans to establish a 5-gigawatt data centre in Abu Dhabi in collaboration with OpenAI, alongside multiple other partnerships with major AI players around the world.
While high temperatures in the Gulf region remain a challenge, countries are working to overcome this through advanced cooling technologies - reinforcing their position as leading AI destinations. These efforts aim to enhance competitiveness across economic, medical, and scientific sectors; improve living standards and services; and create an environment that attracts and empowers talent, ensuring rapid adaptation to emerging technologies.
*The writer is a senior researcher at TRENDS Research & Advisory
