Gulf States Go All In on AI to Ditch Oil Dependency

From Oil Wealth to AI Might

Saudi Arabia and the United Arab Emirates are ramping up investments in artificial intelligence as part of a bold strategy to reduce dependency on oil and reshape their economies. Backed by sovereign wealth funds and eager to position themselves as tech innovators on the world stage, both nations are aggressively pursuing AI development through government spending, infrastructure commitments, and partnerships with global tech firms. Saudi Arabia’s Neom and King Abdullah University of Science and Technology are central to this vision, while the UAE has appointed the world’s first-ever Minister of State for Artificial Intelligence to guide national initiatives. The Gulf is betting big that control over AI capabilities will translate into long-term global influence.

Owning the AI Supply Chain

Both countries are not merely users of AI—they want to build it from the ground up. The UAE has launched its own open-source AI model, Falcon, and is looking to create sovereign data sets independent from U.S. control. Similarly, Saudi Arabia is investing heavily in chip-making capabilities and supercomputing infrastructure to support its AI ambitions. The strategic focus is on building everything from local data centers to LLMs (large language models), ensuring that talent and tools are homegrown. These moves position the Gulf nations as serious contenders in global AI geopolitics, especially amid growing technological rivalry between the U.S. and China.