Gulf Powers Funnel Billions into AI Race to Reshape Middle East Economy

Artificial intelligence has steadily moved to the center of economic planning across the Middle East, particularly over the past two years. What was once discussed mainly in policy papers and national strategies is now reflected in capital spending, infrastructure construction, and operational government projects.

Saudi Arabia and the United Arab Emirates are at the forefront of this shift, driven by the scale of their investments and the speed at which initiatives are being implemented. PwC estimates that artificial intelligence could contribute around $320 billion to Arab economies by 2030, with Gulf states expected to capture the largest share.

In Saudi Arabia, momentum accelerated during 2025. After several years of laying regulatory and institutional foundations, the focus turned toward building and controlling computing capacity on the ground. Officials increasingly describe artificial intelligence as a strategic economic resource, closely linked to productivity growth and long-term diversification.

Abdullah Alswaha, Minister of Communications and Information Technology, oversees a broad portfolio of AI-related projects whose combined value is estimated at 1.3 trillion Saudi riyals, or about $347 billion. Government projections suggest AI could contribute up to 10% of national GDP by 2030.

This shift is visible in the Kingdom’s infrastructure push. Saudi Arabia has become one of the fastest-expanding data center markets in the region, drawing global technology companies to establish local cloud regions and advanced computing facilities. These projects are intended to support AI deployment across public services, energy, finance, and healthcare.

At the same time, authorities have expanded training programs aimed at developing local technical expertise, reflecting concerns about long-term dependence on foreign talent and external operators.

The strategy gained international attention last November at the U.S.-Saudi Investment Forum in Washington, where Alswaha highlighted automation and AI as key drivers of the Kingdom’s next phase of economic development.

A more concrete expression of this approach came with the launch of Humain in 2025. Owned by the Public Investment Fund, the company was created to take direct responsibility for building and operating Saudi Arabia’s AI and advanced computing infrastructure.

According to its chief executive, Tariq Amin, Humain’s goal is to position the Kingdom among the world’s leading AI infrastructure hubs. Work has begun on specialized data centers at multiple locations, each with initial capacities of roughly 100 megawatts, with further expansion planned.

Saudi Telecom Company has also partnered with Humain through a joint venture focused on AI workloads. Together, the projects are expected to push total operational capacity toward one gigawatt over the coming years.

Bloomberg reported that Humain plans to deploy up to 400,000 AI chips by 2030. The United States has approved the sale of approximately 35,000 advanced Blackwell chips from Nvidia, providing access to high-performance computing needed for large-scale models.

Humain has also introduced a conversational application, “Humain Chat,” powered by the Allam language model. The platform supports Arabic and English, including several regional dialects, and is being watched as an early test of Saudi-developed models in real-world use.

Oversight of the broader AI ecosystem remains with the Saudi Data and AI Authority (SDAIA), established in 2019 and chaired by Crown Prince Mohammed bin Salman. SDAIA coordinates data governance, national AI policy, and implementation across government entities.

In 2025, the authority expanded its international partnerships and placed greater emphasis on governance frameworks and responsible deployment, as AI systems moved from pilot stages into operational use.

In the United Arab Emirates, the path has been shaped more by capital deployment and global partnerships than by a single national platform. Abu Dhabi, in particular, has focused on scaling infrastructure and integrating with international technology ecosystems.

Sheikh Tahnoun bin Zayed Al Nahyan, chairman of G42, ADQ, and investment arm MGX, oversees a group of entities increasingly concentrated on artificial intelligence and digital infrastructure. Bloomberg estimates that organizations under his supervision manage or invest in assets worth around $1.5 trillion.

A $1.5 billion strategic investment by Microsoft in G42 strengthened its global position and deepened ties with U.S. technology firms. Through Khazna Data Centers, G42 is expanding capacity, with plans to add about 200 megawatts in the near term and exceed one gigawatt overall.

These developments form part of the “Stargate UAE” project, an advanced computing initiative designed to host large-scale AI workloads. The project aims to reach several gigawatts in capacity, positioning Abu Dhabi as a regional computing hub.

Policy continuity has also played a role. Since his appointment in 2017, Minister of State for Artificial Intelligence Omar Sultan Al Olama has overseen the development of legislative and institutional frameworks that enabled recent investment flows. National spending on AI-related projects has exceeded $148 billion since 2024.

Microsoft has committed $15.2 billion to cloud and AI infrastructure in the UAE between 2023 and 2029, with more than $7 billion already invested by the end of 2025.

Elsewhere, Qatar formalized its AI ambitions in 2025 with the launch of Qai, a national AI company under the Qatar Investment Authority. Qai announced a $20 billion joint venture with Brookfield Asset Management to develop an integrated computing center serving government and commercial sectors.

The QIA has also increased its exposure to global AI firms, participating in a $13 billion funding round for Anthropic that valued the company at $183 billion.

Beyond the Gulf, countries including Bahrain, Egypt, and Morocco have begun implementing national AI strategies focused on regulation, skills development, and targeted infrastructure investment.

While the scale and models differ, the trend across the region is clear: artificial intelligence is no longer confined to strategy documents. It has become part of day-to-day economic execution, with governments now focused on governance, sustainability, and long-term impact.