Middle East AI Boom? US Tech Deals Reshape the AI Landscape

The US - Middle East AI Cooperation: A Complex Strategic Move

Introduction

Hello everyone, this is Best Partners. I'm Da Fei. In today's increasingly fierce global competition in science and technology, the Middle East is quietly emerging as a new focus in the field of artificial intelligence. On May 16, 2025, the United States and the United Arab Emirates announced the signing of an agreement worth over $200 billion and will jointly build the largest AI park in the Middle East. At the same time, AI cooperation is also at the core of the $600 billion economic plan reached between the United States and Saudi Arabia. What strategic intentions do these two agreements contain? And what far-reaching impact will they have on the global AI landscape?

The Content of the Agreements

• AI Infrastructure Cooperation: The core of this so-called "AI - field Marshall Plan" is the deep bundling of the United States and Middle Eastern oil-producing countries in the field of AI infrastructure. According to the agreement, Abu Dhabi's state-owned AI giant G42 will lead the construction of an AI data center park with a total installed capacity of 5GW. The first - phase 1GW project has already started construction. G42 will receive an annual import quota of 500,000 top - of - the - line NVIDIA GPUs, with 20% for its own cloud services and data center construction and 80% supplied to US companies.

• New AI Company in Saudi Arabia: In the $600 billion agreement, Saudi Arabia's newly established AI company HUMAIN plans to deploy a total of 1000 megawatts of AMD and NVIDIA computing equipment within five years. The first - batch order includes 18,000 NVIDIA GB300 chips.

• Investment from US Tech Giants: American tech giants such as Oracle and Google will also inject more than $80 billion in cross-border investment into Saudi Arabia, covering areas such as data center construction and cloud computing services.

Economic and Geopolitical Implications

Economic Aspect

This is a "capital - for - technology" transaction. Middle Eastern sovereign wealth funds have long been苦于 a lack of high-growth investment targets, and AI provides them with an outlet with both strategic value and commercial potential. Middle Eastern capital injection will open the "trillion - dollar capital floodgate" for the US AI industry. These funds will not only be used for data center construction in the Gulf region but also flow back to the US mainland to support the deployment of more GPU racks.

Geopolitical Aspect

The United States attempts to incorporate the Middle East into its "AI alliance" through technology binding to offset China's influence in the Middle East. For example, when the agreement was signed, the US Department of Commerce introduced new regulations, defining the use of Huawei Ascend chips globally as a violation of export controls. The commitments of the UAE and Saudi Arabia in the agreement mean that Middle Eastern countries have to "take sides" in the AI technology route and, to some extent, give up the possibility of in-depth cooperation with other major technology powers such as China.

Benefits for the United States

• Solving Power Supply Problem: Although the United States is the global center of AI research and development, the shortage of data center power supply has become a prominent contradiction. The Middle East, with its rich solar, natural gas, and nuclear energy resources, can support the energy consumption needs of ultra-large-scale data centers. US companies can indirectly obtain computing power support by exporting technical standards and hardware.

• Boosting Chip Manufacturers: The agreements are directly beneficial to chip manufacturers such as NVIDIA and AMD. The annual procurement volume of 500,000 GPUs in the UAE is equivalent to 3.4% of TSMC's CoWoS packaging capacity, which can drive the revenue growth of related enterprises. Moreover, Middle Eastern demand can serve as a "demand buffer" to absorb the excess capacity of the chip supply chain and reduce the risk of re-exporting to regulated markets such as China.

• Cost Advantage: Middle Eastern countries have an advantage in capital costs. The weighted average cost of capital (WACC) of US enterprises is about 9.4% - 17.5%, while Middle Eastern enterprises can reduce the WACC to below 5% with the help of low-cost funds from sovereign wealth funds. This cost advantage can make up for the conservative strategy of US enterprises in "speculative investment."

Uncertainties in the Cooperation

• Risk of Technology Outflow: The "GPU transfer risk" that the US government is most worried about still exists. Although the agreement requires G42 and other enterprises to ensure that chips are used for "legal purposes," physical monitoring is difficult. For example, software telemetry technology for tracking GPU locations can be deceived, and the "counting server racks" method relying on manual inspection is inefficient in large-scale data centers.

• Project Realization Rate: Large-scale scientific and technological cooperation in Middle Eastern countries is often hindered by political changes or economic fluctuations. For example, many scientific and technological investments in Saudi Arabia's "Vision 2030" have not been fully implemented, and the UAE's previous 5G cooperation with China was also adjusted due to external pressure. The construction cycle of this AI park is as long as ten years, and it may face risks such as fiscal tightening caused by falling oil prices and policy changes caused by government changes. In addition, the serious shortage of high-end operation and maintenance talents in the Middle East and excessive reliance on foreign labor may also lead to project delays or cost overruns.

• Security Risks: Regarding risks such as model weight leakage, SemiAnalysis proposed the concept of a "four - layer protection system," but in actual operation, each layer may have loopholes. For example, in 2023, a US AI laboratory suffered a training data leak due to a supply chain attack. Such risks may be magnified in cross-border cooperation. How to coordinate the intelligence agencies of the United States and the UAE to establish a cross - sovereign security response mechanism is still a problem to be solved.

Impact on the Global AI Competition Pattern

• Technology Encirclement of China: At present, Huawei Ascend chips have not yet established a mature overseas ecosystem. The United States has pre - emptively locked in the Middle East market through this agreement, consolidating its own advantages before the "alternative solution" of Chinese manufacturing.

• Marginalization of Europe: While the United States and the Middle East are jointly building AI infrastructure, Europe is陷入 a "computing power famine" and "regulatory dilemma." The strict restrictions of the EU's "Artificial Intelligence Act" and the lag in power grid upgrades have led to the slower construction speed of its data centers compared with North America and Asia. It is predicted that by 2030, the AI computing power capacity of the Middle East may reach 6GW, surpassing Europe to become the third-largest computing power hub in the world after North America and East Asia.

• Technology Dependence of Developing Countries: Although the Middle East has obtained some computing power infrastructure through capital, the core technologies related to artificial intelligence, such as chip design and large-scale model development, are still in the hands of US enterprises. This "hardware dependence" may lead the Middle East to remain in a low-end position in the AI industrial chain for a long time, similar to the economic model of "oil for industrial products" in the past, making it difficult to cultivate local innovation capabilities.

Conclusion and Outlook

Standing at the node of 2025, this US - UAE AI agreement may reveal a trend: computing power infrastructure is becoming a "new frontier" of great-power competition. The United States attempts to establish an "AI satellite system" in the Middle East through the "dual-wheel drive" of technology and capital, while Middle Eastern countries hope to achieve economic transformation and get rid of the "resource curse" through this. However, the realization of this ideal still needs to overcome many practical obstacles. As observers, we need to pay attention to several key signals: the actual delivery progress of NVIDIA GB300 chips, the operation efficiency of the US - UAE joint security working group, and the release of the first large-scale model of Saudi HUMAIN company in 2026. This cross - Pacific and Persian Gulf scientific and technological cooperation is destined to write an important chapter in the global AI industry. It is not only a continuation of technological globalization but also a microcosm of geopolitical restructuring, and it also预示着 a new era of computing power as king. As a technology observer, I will continue to track and help everyone dig out the deep-seated logic and future trends. What do you think of this cooperation? Welcome to leave a message in the comment section. Thank you for watching, and see you next time.