How a Trump Victory Could Pressure Gulf’s AI Diplomacy Amid US-China Tech War
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How a Trump Victory Could Pressure Gulf’s AI Diplomacy Amid US-China Tech War
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By Saniya Fatima
December 2024
The rapid evolution of artificial intelligence (AI) and the technological competition between the United States and China is increasingly shaping the geopolitical chessboard of the 21st century. For countries like Saudi Arabia and the UAE, AI diplomacy is emerging as a cornerstone of their foreign policy, enabling them to transition from oil-dependent economies to diversified, technology-driven global players. Yet, this shared ambition is also sparking regional competition between the two Gulf nations, as each seeks to establish itself as the dominant AI hub in the Middle East. Trump’s victory in the recent U.S. presidential elections portends a more protectionist foreign policy, which could further complicate this regional rivalry by prompting both nations to recalibrate their AI strategies in the face of intensified U.S.-China tech competition.
AI Diplomacy: Shared Ambitions, Divergent Paths
Saudi Arabia and the UAE have been proactive in establishing themselves as AI powerhouses, leveraging their vast resources to attract global partners and investments. Both nations are using AI diplomacy to strengthen their geopolitical clout, but their approaches highlight a simmering regional competition.
The UAE has positioned itself as a first-mover in AI adoption, with entities like G42 leading global collaborations. G42’s partnership with Microsoft Azure to develop a green data center in Kenya underscores the UAE’s intent to be at the forefront of AI-powered sustainable development. The UAE’s National AI Strategy 2031 aims to integrate AI across sectors, from healthcare to transportation, while its leadership in data centers and generative AI development has drawn attention from global tech giants.
Saudi Arabia, on the other hand, has focused on grand-scale initiatives that align with its Vision 2030 agenda. The Kingdom’s Global AI Summit has become a critical platform for shaping global AI conversations, drawing policymakers and industry leaders from around the world. Saudi Arabia’s Prosperity7 Fund has made strategic investments in cutting-edge AI startups, such as Zhipu AI, an alternative to Open AI, while its membership in the UN Advisory Body on Artificial Intelligence underscores its commitment to global AI governance.
This competition is not confined to external partnerships. Regionally, both nations are vying to attract the best talent, host global AI conferences, and serve as the go-to destination for AI research and innovation. Their rivalry is driving investments in infrastructure, research, and AI-enabled industries, further accelerating the region’s technological advancement.
Trump’s Nationalist Agenda and U.S. Pressure
A Trump presidency will add significant pressure to the Gulf nations’ AI strategies by intensifying the U.S.-China tech rivalry. Trump’s "America First" approach and heightened scrutiny of technology transfers could push countries like Saudi Arabia and the UAE to choose between aligning more closely with the U.S. or maintaining strategic ties with China, even as they grapple with their own rivalries.
The U.S. has made it clear that it expects countries to “choose sides,” particularly in the sensitive realm of advanced technologies. Concerns over potential leaks of U.S. technologies to China have previously led to delays in export licenses for advanced semiconductors and AI servers to both Gulf nations. The UAE has responded by making visible efforts to address U.S. concerns. G42, for instance, has divested from Chinese companies and removed Chinese hardware from its operations to align with American standards and secure the Microsoft deal. Saudi Arabia has also been careful to limit collaborations with Chinese entities, with institutions like the King Abdullah University of Science and Technology (KAUST) adhering to US pressure by pledging to limit its collaborations with China. However, these measures point to the precarious balance both nations must strike to maintain access to cutting-edge U.S. technologies while preserving their relationships with China - a major player in the AI and semiconductor space.
Opportunity for South-South Collaboration and Global Diversification
While the UAE and Saudi Arabia compete to dominate the AI landscape regionally, both understand the importance of diversifying their global partnerships to mitigate the risks associated with the U.S.-China tensions. This diversification extends to emerging markets across the Global South, where countries like Kenya, Nigeria, India, and Malaysia offer viable opportunities for collaboration.
The African continent’s abundant critical minerals—essential for semiconductor production—and its young, tech-savvy population make it an attractive destination for investment in AI and related industries. Countries like Zambia already have a dedicated critical mineral strategy in place, while others are adopting a proactive approach too when it comes to critical minerals and AI. The UAE’s investments in Kenya’s green data center and AI digital skills training initiatives reflect a strategic move to tap into Africa’s potential. Beyond Africa, countries like India, Costa Rica, Malaysia, and Mexico provide valuable lessons in building resilient supply chains. These nations have demonstrated that investing in manufacturing capacity can create a feedback loop of innovation, workforce development, and sustained economic growth. For the Gulf nations, partnerships with these markets could provide a stable supply chain for high-performance chips needed to train large-scale AI models.
Conclusion
The rivalry between Saudi Arabia and the UAE in the AI space, while intense, has the potential to drive significant innovation and push both nations to new technological heights. From the UAE’s acquisition of cutting-edge Nvidia GPUs to Saudi Arabia’s ambitious plans for AI-enabled smart cities and data centers, this competition is fostering advancements that position the Gulf as a hub for AI excellence. However, to sustain and scale their ambitions, both nations must look beyond regional competition and invest in long-term geopolitical resilience by diversifying partnerships and fostering innovation in emerging markets. A Trump win in the U.S. heightens the stakes, but if the UAE and Saudi Arabia channel their rivalry strategically, they can navigate the complexities of the U.S.-China tensions, secure their place in the global AI landscape, and shape the future of technology on their terms, while contributing to a more diverse AI and tech supply chain.
Saniya Fatima is a Sr Analyst at Botho Emerging Markets Group