Saudi Arabia, UAE Race to Lead AI Tech in Middle East

Post by : Bandanpreet Kaur

Saudi Arabia and the United Arab Emirates (UAE) are in a strong competition to become the main technology center for artificial intelligence (AI) in the Middle East. Both countries are spending a lot of money and making powerful partnerships with big American tech companies. Their goal is to grow their economies by focusing on technology instead of depending only on oil.

Saudi Arabia’s plan, called Vision 2030, clearly shows that AI is a big part of the country’s future. Around 70% of its major goals involve using data and AI, according to leaders from the Saudi Data and AI Authority.

The UAE took early steps by creating the world’s first Ministry of Artificial Intelligence in 2017. It also opened the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), which is now launching a new AI lab in Silicon Valley, USA.

At first, the UAE seemed to have the lead in AI development because it started earlier. But now Saudi Arabia is catching up fast. With big investments and government-supported projects, the country is making a strong comeback.

In 2025 alone, Saudi Arabia announced several huge projects:

• A government-owned AI company named Humain will start a $10 billion fund to support new AI companies.

• Google Cloud and the country’s investment fund (PIF) are together investing $10 billion to build a major AI center in Saudi Arabia.

• Amazon Web Services (AWS) and Humain are putting $5 billion into an “AI Zone” to help develop more AI-based services.

• AWS is also investing $5.3 billion to set up a new cloud computing area in the country.

• Oracle will spend $14 billion over the next ten years to build digital and AI infrastructure.

• Equinix plans to build a $1 billion data center for cloud and AI services.

The UAE has also made strong moves in AI:

• It created MGX, a new investment company focused on AI. It is supported by Mubadala and G42, two big UAE-owned firms. MGX plans to invest $100 billion in AI technologies, chips, and infrastructure.

• MGX is also investing in Stargate, a $500 million AI data center project led by OpenAI.

• Stargate UAE is a big AI data center project that includes partners like Oracle, Nvidia, and SoftBank. It will be able to handle up to 1 gigawatt of power.

• Abu Dhabi is spending $3.54 billion to fully automate its government services between 2025 and 2027.

This regional race is also affected by the global tech rivalry between the United States and China. Former U.S. President Donald Trump is working to make sure Gulf countries like Saudi Arabia and the UAE continue using U.S. technology instead of switching to Chinese tools. He even removed earlier limits on selling computer chips to these countries to help them stay in the U.S. tech circle.

The New Battle: Data Centers and Energy Power

To lead in AI, countries need large data centers. These buildings store and process huge amounts of data and use a lot of energy.

As of early 2025:

• Saudi Arabia has more than 300 megawatts of data center capacity.

• The UAE has over 250 megawatts of capacity.

But when we look at what they plan to build in the future:

• Saudi Arabia plans to add 2,200 megawatts.

• UAE is expected to add only 500 megawatts.

According to the International Institute of Strategic Studies (IISS), countries in the Middle East are at different levels of AI development. Israel is the most advanced, followed by UAE and Saudi Arabia. After that are Qatar, Oman, and Bahrain. Other countries are far behind.

Experts say that powerful data centers are necessary for AI because AI needs a lot of computing power and storage. The Middle East has two things needed to build strong AI systems: cheap energy and lots of money. Gulf countries together have about $5 trillion in government investment funds, which gives them a big advantage.

Challenges Ahead

Even with all this money and energy, Saudi Arabia and the UAE still face big challenges. Neither country has made an advanced AI system like OpenAI’s GPT-4 or China’s DeepSeek. There are not enough highly trained AI experts in the region.

Although they have strong funding and resources, building a culture of innovation and research will take time.

Still, one thing is clear: the race for global AI leadership is no longer just happening in the United States or China. It is also happening in Riyadh and Abu Dhabi, with billions of dollars and big dreams for the future.

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