How are the UAE and Saudi Arabia positioning themselves in the frontier AI model development supply chain? How can the United States best leverage its new partnerships with these countries towards its national security and economic goals?
Download the new report by Kristina Fort and Nikhil Mulani, which answers these questions.
This paper examines how the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) are emerging as pivotal actors in the global race for frontier AI dominance, and analyzes the implications for U.S. strategic interests. It evaluates each country’s current position in the frontier AI development and deployment supply chain – detailing the UAE’s and KSA’s massive investments in AI infrastructure and connections with the U.S., China, and France – as well as the two Gulf states’ unique advantages in capital, energy, and centralized governance. The paper then explores cross-cutting geopolitical dynamics, such as the Gulf actors’ balancing act between Washington and Beijing and a nascent “silent” rivalry between the UAE and KSA for regional AI leadership. Following case studies on the UAE and KSA, the analysis discusses shared themes and concludes with actionable recommendations. Gulf investments are reshaping global tech supply chains and could either strengthen or undermine U.S. technological leadership, depending on U.S. engagement. The paper recommends a proactive U.S. strategy to leverage Gulf AI ambitions while safeguarding national security. Recommendations include enforcing rigorous technical safeguards on Gulf-based AI infrastructure, tightening export control oversight to prevent diversion of advanced chips, joint targeted R&D investment initiatives, co-development of international AI standards, strict investment screening via CFIUS, and measures to prevent conflicts of interest. These actions would better align Gulf AI partnerships with long-term U.S. strategic objectives.
Governments worldwide are seeking a strategic advantage in the development and deployment of frontier artificial intelligence (AI). The USA and China are often treated as the major powers in a race towards AI dominance. While these two countries are the leading actors, other countries are playing increasingly significant roles in the AI supply chain and, as a result, altering global commercial and geopolitical dynamics. These so-called swing states include two Gulf powers – the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA), each of which has recently ramped up its attention and investment in AI.
Our goals in this piece include evaluating how the UAE and the KSA are each currently situated in the global frontier AI model development and deployment supply chain and offering recommendations to the United States government on how best to partner with entities in these countries to protect national security and economic interests over the long-term.
Both the UAE and the KSA have strategic advantages in capital and energy, which allow them to place considerable bets on AI infrastructure and research. Development and deployment of frontier AI (which we define as highly capable foundation models) requires massive investments in energy and data center infrastructure.2 These countries’ large sovereign wealth funds, existing advantages in access to energy resources, and their forecasts of diminishing national returns from oil extraction have created perfect incentives for them to invest in becoming leaders in the frontier AI supply chain. Both the UAE and KSA are pursuing this goal through investing in domestically-based companies and infrastructure, as well as companies and infrastructure based in the United States, China, and elsewhere.
Notable recent developments include the U.S.–UAE AI Acceleration Partnership, centered on building a 5 GW AI computing campus in Abu Dhabi – the largest outside the U.S.. The first phase of this will be “UAE Stargate" (a 1 GW supercomputing cluster). Separately, the U.S. and Saudi Arabia announced a Strategic Economic Partnership under which NVIDIA will provide 18,000 cutting-edge GPUs to a new Saudi AI startup (Humain) backed by the Kingdom’s Public Investment Fund. Additionally, at the 2025 Paris AI Action Summit, the UAE and France launched a joint AI Campus project (C30–50 billion for a 1+ GW data center in Europe). Around the same time, the UAE committed an unprecedented $1.4 trillion investment over the next decade in U.S. sectors including AI, semiconductors, energy, and manufacturing, and Saudi Arabia unveiled $14.9 billion in new tech investments (focused on data centers, cloud infrastructure, and AI R&D) at its LEAP 2025 conference.
Both the UAE and Saudi Arabia have doubled-down on local efforts at large language model (LLM) development, including the UAE’s homegrown Falcon (open-sourced 40B parameter model) and Jais (13B bilingual Arabic-English model) and Saudi Arabia’s plans to partner with Google on building advanced Arabic language models.
Combined, these investments illustrate the UAE’s and KSA’s interest in developing international partnerships, building local AI infrastructure to drive the Gulf’s regional AI transition, and playing a key role in meeting the global demand for frontier AI infrastructure and AI services.
The UAE’s approach to AI governance is an aggressive pro-growth strategy that involves building government expertise and capacity, incentivizing local adoption and innovation, and establishing strategic partnerships with leading companies and countries, all while holding off on instituting rigid regulatory guidelines out of concern for discouraging entrepreneurship or investment.
The Kingdom of Saudi Arabia (KSA) entered the AI space slightly later than the UAE. The KSA unveiled Vision 2030, a plan to diversify the Saudi economy beyond oil, in 2016. Since then, like the UAE, the KSA has launched an ambitious pro-growth national AI strategy funded by oil revenues. The KSA is establishing dedicated AI institutions and developing talent through specialised research centers and universities.
Partnerships with the United States and France
As the UAE and KSA continue to build out their AI strategies, other governments must determine how to partner, compete, or otherwise coordinate with these countries on AI initiatives.
In 2025, the UAE and KSA announced landmark artificial intelligence initiatives in collaboration with the United States and France, reflecting each nation’s strategic goal of becoming a global AI leader. These new partnerships are designed to advance national priorities: the UAE is leveraging U.S. partnerships to build domestic AI capacity and talent, while Saudi Arabia is investing oil wealth into AI to diversify its economy in line with Vision 2030’s objectives.
Influence of China
Both the KSA and the UAE are walking a tightrope on AI partnerships, balancing between the U.S. and China. While both countries publicly claim to be “decoupling" from China, each still has numerous investments in and linkages to the Chinese tech ecosystem. Their interest in partnership with the U.S. is not value-motivated but is instead linked to their desire to hedge their bets on who might prevail in the AI race. Therefore, the U.S. should remain vigilant about offshoring advanced chips and exporting advanced models that could jeopardise its strategic advantage if diverted or misused by adversaries. Since partnerships with the UAE and KSA are transactional, the U.S. should be methodical and cautious about ensuring the proper security and governance conditions are in place for new data center infrastructure.
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