Saudi Arabia and the UAE are betting big on AI to shift from oil to data exports. Both countries are funneling cash and resources into AI ventures backed by massive sovereign funds—Saudi’s $940bn Public Investment Fund and Abu Dhabi’s $1.7tn wealth fund via AI investment vehicle MGX.
Saudi Arabia’s finance minister Mohammed al-Jadaan said it plainly earlier this year:
“Instead of exporting oil, we will export data.”
Big partnerships took shape last month during Donald Trump’s Middle East visit, linking Gulf funds with US tech firms. The deals aim to secure chips, talent, and data center hosting in exchange for Gulf cash and infrastructure.
The push comes as the International Energy Agency expects oil demand to peak by decade’s end. AI could add $150bn to Gulf Cooperation Council economies, says McKinsey.
But Gulf efforts face hurdles. High-profile mega-projects already run over budget. Hosting data centers risks draining huge amounts of energy and water, pressuring other sectors.
Gulf countries are focusing on applying AI in manufacturing, port management, and energy infrastructure—not just data hosting. Saudi Aramco is using AI to detect leaks and blockages. The UAE’s 2031 AI strategy targets finance and smart cities as growth engines.
Talent shortages are a big problem. The UAE attracts foreign experts with big pay and low taxes, but local AI hiring gaps persist. Saudi Arabia’s AI roles report a 50% hiring shortfall, especially in machine learning and data science.
Education gaps make things worse. UAE students lag OECD averages in math, reading, and science.
The Gulf also needs strong AI regulations. Foreign firms worry about handing over data to authoritarian regimes that might misuse it for surveillance. Trust will be key for Gulf nations to host data centers and foster AI innovation.
Data may be the new oil in the Gulf. But turning AI into lasting growth won’t be as simple as building rigs and pipelines.
