Is the Middle East Making AI its Next Major Energy Export?

The Gulf’s energy strategy is evolving.

With the global economy shifting toward AI and demand for fossil fuels flattening, energy-rich states in the Middle East are now turning their attention to a different kind of resource: compute power.

Mohammed Soliman, Senior Fellow at the Middle East Institute in Washington DC, says it plainly: "Compute is the new oil."

In a region long associated with crude exports, that statement signals a profound shift.

Just as oil fuelled the industrial growth of the 20th century, high-performance computing and AI data infrastructure could now play a similar role in shaping the 21st.

Data infrastructure as digital energy

AI's expanding influence across industries makes data processing capacity a strategic commodity.

Known in tech circles as "compute", this refers to the processing power required to train and run AI models.

It relies on advanced semiconductor chips, specialised infrastructure and enormous data storage.

In this new energy equation, Gulf states are positioning themselves as major exporters of compute power.

The United Arab Emirates (UAE) already has much of the groundwork in place: deep financial reserves, a modern logistics network and an ability to mobilise state-backed investment quickly.

That combination is now being directed at AI infrastructure.

One high-profile example is the US$100bn deal discussed during US President Donald Trump’s visit to the UAE earlier this year, aimed at boosting the Gulf’s digital economy.

At the centre of that announcement is Stargate, a vast AI campus co-led by the UAE and the US, planned as the largest of its kind outside North America.

Funded by G42, a technology firm with state links, Stargate will serve as a key hub for US companies like OpenAI, providing the data centre capacity needed to train large AI models.

Hardware will be provided by Nvidia, a dominant force in the chip market. Tech firms Cisco and Oracle are involved in the build, while SoftBank joins as a strategic partner.

Hassan Alnaqbi, CEO of Khazna, the UAE’s largest data centre operator, explains the vision: "Just like Emirates helped turn the UAE into a global hub for air travel, now the UAE is at a stage where it can become an AI and data hub."

Khazna, majority owned by G42, operates 29 data centres and will construct key parts of the Stargate complex.

Regional energy redefined through AI

The UAE is not acting alone. Saudi Arabia, the largest economy in the region, is also entering the AI infrastructure race.

Its sovereign wealth fund, the Public Investment Fund, has launched Humain, a national AI company that aims to deploy hundreds of thousands of Nvidia chips over five years.

Meanwhile, Mubadala, the Abu Dhabi-based state investment company, has backed both G42 and MGX, a US$100bn AI venture that counts Microsoft as a central technology partner.

This shift signals a strategic change in the region's investment approach.

Rather than holding passive stakes in global tech giants, Gulf sovereign wealth funds are taking more active roles in shaping the infrastructure of AI.

Energy infrastructure in the traditional sense, pipelines, ports, oil terminals, is now being matched by high-performance computing campuses and AI data centres.

The objective remains the same: control over critical supply chains, whether fossil fuels or data flows.

However, AI infrastructure depends not only on hardware and funding, but also on skilled personnel.

Talent recruitment remains a challenge.

The Gulf states have historically used high salaries and tax advantages to attract professionals and they are using the same tactics now, alongside new incentives.

Long-term residency programmes, so-called "golden visas", and business-friendly regulations are being offered to AI researchers and firms.

Baghdad Gherras, Chief Data Officer at Medad Holdings LLC, sees potential in this approach: "Building world-class digital and AI infrastructure will act as a magnet."

Still, the Gulf has yet to produce an AI firm of the scale of OpenAI or DeepSeek.

While the infrastructure is advancing quickly, the region is working to build the kind of research ecosystem needed to develop foundational AI technologies. Without that, the reliance on imported software and models will remain.

A geopolitical realignment in energy terms

AI infrastructure is not only reshaping energy policy, it is also drawing Gulf states into strategic realignments.

Trump’s presence at the Stargate announcement symbolised the growing role of US firms in shaping the Gulf’s AI ambitions.

That shift is part of what Mohammed Soliman describes as alignment with the American "AI stack"—referring to the full chain of AI capability, from chip manufacturing and data storage to modelling software.

"It's basically us trying to bring a promising, rising AI region – which is the Gulf – into the American AI stack, to be on Team America AI," says Mohammed.

Baghdad agrees: "At this stage the Americans are ahead in the AI game. So, it made sense for the UAE to bet on them."

Energy in the Gulf is no longer just oil and gas.