The global race for artificial intelligence leadership has created a new form of statecraft, “infrastructure diplomacy”. Rather than wielding influence through military power or ideological alignment, nations are now building strategic relationships through control of the computational infrastructure that powers AI. At the forefront of this transformative trend are the Gulf states, whose strategic investments in AI technology are reshaping global partnerships and challenging traditional power hierarchies.
Infrastructure diplomacy represents a sophisticated advancement beyond traditional economic or military diplomacy. It leverages critical technological systems to create durable relationships based on computational interdependence. For Gulf nations—with their immense financial resources, abundant energy supplies, and strategic geographic positioning—this approach offers an unprecedented opportunity to amplify their global influence.
The evidence of this strategic shift is clear in the numbers. Saudi Arabia’s $40 billion commitment to AI development and the UAE’s new investment fund expected to manage over $100 billion in AI and semiconductor assets reflect the region’s determination to become a global AI powerhouse. According to research from the World Economic Forum (WEF), the GCC’s investments in advanced technology infrastructure continues to grow rapidly.
Strategic Advantages: Why the Gulf Is Uniquely Positioned for AI Infrastructure Leadership
The Gulf’s AI infrastructure strategy builds upon a unique constellation of competitive advantages that few other regions can match:
1- The Energy-AI Nexus
Advanced AI requires enormous computational resources that demand significant energy. Training a single large AI model can consume as much electricity as 100 households use in a year. Gulf states, with their abundant and low-cost energy, offer a compelling solution to this challenge. As noted by Foreign Affairs Magazine (October 2024), “The infrastructure required to train the latest generation of AI models uses vast amounts of energy, capital, and land—three things the Gulf states have in abundance.”
This energy advantage creates a natural synergy between AI development and the Gulf’s traditional strengths. By leveraging these resources to power next-generation AI systems, Gulf nations are creating a strategic bridge between their hydrocarbon heritage and the digital future.
2- Strategic Connectivity Infrastructure
The Gulf’s geographic position places it at the digital crossroads of global data flows. Submarine cables traversing the Red Sea and Persian Gulf carry approximately 90% of data traffic between Europe and Asia. This digital centrality provides Gulf states with both physical infrastructure advantages and strategic leverage in global data flows.
The UAE’s establishment of the Middle East’s largest data centre ecosystem and Saudi Arabia’s recent announcement of a 5-gigawatt AI campus underscore how the region is capitalising on this geographic advantage. These facilities aren’t merely commercial ventures—they’re strategic assets that cement the Gulf’s position as an essential node in global AI infrastructure.
3- Sovereign Capital Deployment
Unlike many technology initiatives that depend on venture capital or public markets, Gulf AI strategies benefit from sovereign wealth funds that can deploy patient capital toward long-term strategic objectives. These financial resources allow for investments in foundational infrastructure and technical capabilities that might not show immediate commercial returns but create lasting strategic advantages.
The coordination between sovereign investment vehicles like Saudi Arabia’s Public Investment Fund (PIF) and technology development initiatives creates a uniquely integrated approach to AI infrastructure development. This alignment between financial resources and strategic technological priorities is a hallmark of the Gulf’s approach to infrastructure diplomacy.
Beyond Technology: The Diplomatic Architecture of AI Infrastructure
What distinguishes the Gulf’s AI strategy from mere technological investment is its deliberate integration with diplomatic objectives. Infrastructure diplomacy creates leverage through three primary mechanisms:
1- Technology Sovereignty Alliances
By developing independent AI infrastructure, Gulf states are positioning themselves as potential partners for countries seeking technology advancement without dependence on either American or Chinese systems. This approach is particularly appealing to nations concerned about digital sovereignty.
The impact of this strategy is already evident in the UAE’s growing technological partnerships across Asia and Africa. As reported by OilPrice.com (November 2024), the region’s geographic position, connecting Asia and Europe, can give it a differentiated role in bringing the global south into the age of AI. These partnerships reflect a new form of alliance-building based on technological complementarity rather than traditional geopolitical considerations.
2- Multilateral Technology Governance
Control of AI infrastructure provides Gulf states with growing influence in emerging governance frameworks for artificial intelligence. By developing substantial AI capabilities, these nations have earned seats at the table in global discussions about AI standards, data governance, and regulatory approaches.
Saudi Arabia’s AI ethics framework and the UAE’s participation in UNESCO’s global AI ethics initiatives demonstrate how infrastructure investments translate into diplomatic influence in technology governance. This approach allows Gulf states to help shape AI governance in ways that respect sovereignty while enabling technological advancement.
3- Digital Ecosystem Catalysis
The most sophisticated dimension of infrastructure diplomacy is the creation of technology ecosystems that attract global talent, capital, and partnerships. By establishing themselves as AI hubs, Gulf nations are creating gravitational pull for researchers, companies, and institutions seeking to participate in cutting-edge AI development.
The UAE’s establishment of the world’s first AI university in 2019 and the quadrupling of its AI workforce since 2021 exemplify this ecosystem-building approach. By establishing AI universities, research centres, and innovation hubs, Gulf states are creating concentrated communities of technical expertise.
These knowledge ecosystems attract international researchers, entrepreneurs, and companies who collaborate with local talent. Such collaboration naturally creates diplomatic connections as governments engage to support their nationals working in these hubs. Commercially, these communities facilitate knowledge transfer, startup creation, and industry partnerships that extend far beyond the technology sector itself.
When countries have their brightest minds working together on cutting-edge technology, it creates lasting personal and institutional relationships that strengthen diplomatic ties organically through professional networks rather than formal agreements alone.
Strategic Implications for Global Decision-Makers
For executives, strategists, and policymakers worldwide, the Gulf’s infrastructure diplomacy holds significant implications:
1- New Partnership Paradigms
Organisations seeking AI capabilities should consider Gulf states as potential strategic partners, not merely markets or investment sources. The region’s combination of infrastructure, regulatory frameworks, and talent initiatives offers unique advantages for companies building global AI strategies.
Forward-thinking enterprises are already recognising this opportunity. Microsoft‘s partnership with Abu Dhabi’s G42 and NVIDIA‘s agreement to provide 18,000 advanced AI chips to Saudi Arabia reflect how global technology leaders are engaging with the Gulf’s AI ecosystem as a strategic priority.
2- Comparative Infrastructure Advantage
Nations developing their own AI strategies should assess how Gulf infrastructure investments might complement their capabilities. Rather than attempting to replicate the entire AI stack, many countries may benefit from partnering with Gulf states for specific infrastructure requirements while focusing their own resources on application development and local talent cultivation.
This complementary approach creates possibilities for mutually beneficial partnerships. As The Brookings Institution noted in January 2025, such collaborations can help developing nations leverage AI for growth while maintaining technological sovereignty.
3- Standards and Regulatory Influence
As Gulf states expand their AI infrastructure, they gain increasing influence over technical standards and regulatory approaches. Organisations with global operations should engage proactively with the Gulf’s emerging AI governance frameworks, as these may become increasingly influential in international technology regulation.
The Gulf’s growing role in setting AI standards offers opportunities for companies to shape evolving regulatory frameworks by participating in the region’s technology initiatives. Early engagement with these frameworks can provide significant competitive advantages as AI governance continues to evolve globally.
Future Horizons for Infrastructure Diplomacy
Looking ahead, several emerging trends will shape the evolution of the Gulf’s infrastructure diplomacy:
1- Specialised AI Infrastructure
The next phase of AI development will likely involve increasingly specialised infrastructure for specific applications, from generative AI to scientific computing. Gulf investments are already shifting toward these specialised capabilities, with Qatar’s recent announcement of a quantum computing research centre and the UAE’s focus on biocomputing infrastructure.
For global organisations, these specialised investments create opportunities for targeted collaborations that leverage the Gulf’s infrastructure advantages for specific AI applications. Partnerships focused on these specialised capabilities can deliver significant competitive advantages in rapidly evolving technology domains.
2- Sustainable AI Infrastructure
As energy requirements for AI continue to grow, the Gulf’s investments in renewable energy infrastructure create possibilities for environmentally sustainable AI development. Saudi Arabia’s construction of solar-powered data centres and the UAE’s integration of nuclear energy into its AI infrastructure strategy demonstrate the region’s focus on sustainable computing.
These initiatives position Gulf states to address one of AI’s most significant challenges—its environmental impact—while maintaining their competitive advantages in computational infrastructure. Organisations concerned about the environmental footprint of AI should consider how the Gulf’s sustainable infrastructure initiatives align with their own environmental objectives.
3- Talent and Knowledge Networks
Perhaps the most enduring aspect of infrastructure diplomacy is its creation of knowledge networks that transcend physical infrastructure. The Gulf’s investments in AI education, research institutes, and talent development are creating human capital networks that will shape technology development for decades to come.
Forward-thinking organisations should engage with these emerging knowledge ecosystems through research partnerships, talent exchanges, and collaborative innovation initiatives. These human connections ultimately create more durable relationships than physical infrastructure alone.
Computing Power as Diplomatic Currency
The Gulf’s emergence as an AI infrastructure power illustrates how technology is fundamentally reshaping traditional notions of geopolitical influence. Through strategic investments in AI infrastructure, Gulf countries are creating a new model of diplomatic engagement that leverages their unique advantages in energy, geography, and capital.
As we move toward a future where artificial intelligence increasingly shapes economic development, national security, and cultural expression, those who control the infrastructure underpinning these systems will wield outsized influence. The Gulf’s AI sovereignty movement represents not just regional transformation, but a profound shift in how national power is projected globally—one where computational capability becomes as strategically important as military might or natural resources.
For decision-makers across sectors, understanding and engaging with the Gulf’s infrastructure diplomacy isn’t merely an option, it’s an essential element of strategic planning in an era where technological capability increasingly determines global influence and opportunity.
* Haydar Al-Rikabi is the Founder of AI Middle East and Digital Transformation Consultant at The International Centre for Development Studies.
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