Gulf Countries Pledge $2 Trillion in AI Competition with US, China

Published Date : 24/06/2025 

The UAE, Saudi Arabia, and Qatar pledged $2 trillion in AI investments, aiming to become global tech superpowers. Partnerships with Nvidia, Google, Oracle, AMD, and AWS are key to their strategy. 

The UAE, Saudi Arabia, and Qatar have pledged a staggering $2 trillion in deals during U.S. President Donald Trump’s Middle East tour last month, sparking a debate over whether massive spending can secure tech superpower status. This ambitious investment marks a significant step in the region’s quest to diversify beyond oil and become a global leader in artificial intelligence (AI).

Saudi Arabia committed $600 billion over four years, while Qatar earmarked $1.2 trillion and the UAE said it would add $200 billion to an existing $1.4 trillion plan to develop artificial intelligence. Major tech giants like Nvidia, Google, Oracle, AMD, and Amazon Web Services (AWS) secured landmark partnership contracts spanning AI research facilities, computer chips, defense systems, aviation, and energy.

However, the critical gap between ambition and achievement remains. Talent shortages, regulatory gaps, and the transition from pilot projects to real deployment require more than just financial investments. Tech executives emphasize the need to build robust institutions to support these ambitious goals.

“The Gulf will be an AI superpower once massive spending turns into genuine technological leadership,” said Prabhakar Posam, group chief information officer at Dubai-based logistics company Transworld Group. “The foundation exists through abundant capital and political support, but developing skilled workers and mature institutions will determine ultimate success.”

The promised investments mark a defining moment in the Middle East’s resolve to look beyond oil. More than 65% of the region’s organizations are planning to increase their AI spending, according to research conducted in February by Deloitte and the Mohamed bin Zayed University of Artificial Intelligence.

“The capital and political will are already in place,” Saif Mashat, area vice president for the Middle East and Africa at California-based software-as-a-service provider ServiceNow, told Rest of World. “The next step is building the governance, talent, and operating models needed to deliver results at scale.”

G42, a state-backed AI developer, is building a 5-gigawatt AI campus in Abu Dhabi — the largest of its kind outside the U.S. Saudi Crown Prince Mohammed bin Salman aims to push the Saudi-U.S. investment figure from the promised $600 billion to $1 trillion “in the coming months.”

“U.S. partnerships have added value through knowledge exchange and innovation,” Sid Bhatia, area vice president and general manager of AI at U.S. machine learning company Dataiku, told Rest of World. “However, the Gulf’s AI momentum is driven primarily by local leadership, vision, and investment.”

The UAE has methodically built its AI capabilities since appointing the world’s first minister of AI and introducing Falcon large language models that enhance automation and decision-making. Its ASK71 platform, which uses existing knowledge to generate insights and automate workflows, has been adopted across ministries, with Arabic-English AI “copilots” streamlining public services.

Saudi Arabia is building its AI capabilities through its sovereign Public Investment Fund, focusing on megaprojects such as the futuristic city Neom and its newly unveiled AI entity Humain. The kingdom’s partnership with Nvidia will build 500 megawatts of AI factories over five years. These will be powered by hundreds of thousands of graphics processing units, starting with 18,000 of Nvidia’s Grace Blackwell superchips.

Beyond the Nvidia deal, the kingdom signed a $10 billion agreement with AMD, partnered with AWS on a joint $5 billion AI zone, and collaborated with Qualcomm on edge AI and Arabic-language models. Google, Oracle, Salesforce, AMD, Uber, and Saudi-based DataVolt announced investments totaling $80 billion, with DataVolt alone planning to invest $20 billion in AI data centers on U.S. soil.

Defense contracts formed a key portion of the Saudi package, with $142 billion allocated for U.S. weapons systems in what the White House called the largest defense sales agreement in history.

“The region is investing heavily in AI infrastructure and talent development,” Avneesh Prakash, co-founder and CEO of Dubai-based AI company Camb.ai, told Rest of World. “This will not just ensure technology independence but also address global AI demands.”

In the UAE, AWS partnered with local telecommunications provider E& and the UAE Cybersecurity Council in an initiative expected to contribute $181 billion to the country’s digital economy by 2033.

“The UAE moved early and is already delivering results,” Chiara Marcati, chief AI advisory and business officer at state-backed AI developer AI71, told Rest of World. “Saudi Arabia is building the infrastructure and ecosystems that could give it an edge over time.”

While Saudi Arabia and the UAE dominated the narrative, Qatar carved a specialized niche in defense, aviation, and quantum computing with $1.2 trillion in economic exchange agreements. Qatar Airways placed a historic $96 billion order for 210 Boeing aircraft, while Quantinuum formed a venture with Al Rabban Capital for quantum computing.

The path for the Middle East’s transformation was already paved through national AI strategies, sovereign wealth fund allocations, and institutional reforms before U.S. involvement put the spotlight on the region. Rather than copying established models, Gulf nations are developing their own distinct AI frameworks suited to regional needs and cultural requirements.

“U.S. support matters, particularly when it comes to private sector investment and technology partnerships,” Mashat said. “But long-term positioning will depend more on regional ownership of strategy, infrastructure, and talent rather than on external backing.”

The U.S.’ involvement in the Middle East will bring credibility and accelerate capability transfer, according to ServiceNow, which recently committed $500 million to help regional data centers transition from pilot to real-time projects. The UAE and Saudi Arabia are taking different paths, with the UAE moving faster on early projects, while the kingdom focuses on building world-class facilities.

“The UAE has taken an early lead in policy frameworks, institutional readiness, and pilot projects,” Mashat said. “Saudi Arabia is operating on a different scale. The focus is on becoming a global AI hub, building national platforms, integrating with gigaprojects, and using AI to modernize core economic sectors.”

Despite the challenges ahead, some industry executives remain optimistic about the region’s potential to emerge as a major AI center.

“The Gulf will be the new AI equator,” Prakash said. 

Frequently Asked Questions (FAQS): 

Q: How much did Gulf nations pledge for AI investments?

A: Gulf nations pledged a total of $2 trillion in AI investments during U.S. President Donald Trump’s Middle East tour.

Q: What are the key areas of focus for these AI investments?

A: The key areas of focus include AI research facilities, computer chips, defense systems, aviation, and energy.

Q: Which tech companies are involved in these partnerships?

A: Nvidia, Google, Oracle, AMD, and Amazon Web Services (AWS) are among the key tech companies involved in these partnerships.

Q: What is the significance of the UAE's ASK71 platform?

A: The ASK71 platform, adopted across ministries, uses existing knowledge to generate insights and automate workflows, streamlining public services.

Q: How does the U.S. involvement impact the Gulf's AI strategy?

A: U.S. involvement brings credibility and accelerates capability transfer, although long-term success will depend more on regional ownership of strategy, infrastructure, and talent. 

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