The Middle East is embracing AI — but will they miss the opportunity to power it with clean energy?
To further their economies’ diversification, Middle Eastern countries have aggressively backed AI. The three major petrostates of Saudi Arabia, UAE, and Qatar have been particularly active, together committing roughly $2.5 trillion to major technology investments, including the development of AI technology and data center infrastructure. Each country has its own goal, but Gulf states are clearly intent on establishing their own AI industries, developing Arabic-language LLMs, and positioning the region as a third AI power center, distinct from the U.S. and China. (Notice that Europe is missing from the list.)
But these investments aren’t happening in a vacuum. Today, the makings of a war are escalating in the region (though for now at least the Israel-Iran ceasefire seems to be holding), and threatening the stability that has helped fuel the growth and investment in the countries’ AI and energy infrastructure.
There’s further reason for worry. Over the past 15 years, many countries in the Middle East have embarked on ambitious energy transition initiatives, both to reduce their budgets’ dependency on oil revenues, and to use their riches to build diversified energy companies — ones with the potential to become global solar and wind project developers targeting the regions of Africa, Europe, Southeast Asia, and more recently, the U.S.
But according to the IEA, clean energy accounts for roughly 15% of total energy investments in the Middle East. This is lower than in most other developed regions of the globe, with just five of the countries in the region setting net-zero targets at all.
And much like in the U.S., AI complicates this picture. The urgent demand for firm power at the gigawatt scale rewards the biases of those who supply fossil fuels, particularly gas. This is how the Trump administration talks about AI, and the language has clearly shifted within the Middle East as well. As Sultan Ahmed Al Jaber of Abu Dhabi National Oil Company (ADNOC) said recently about the need for natural gas to power data centers, “energy realism is taking center stage, and that excites me…because we’re no longer working around unrealistic mandates.” This statement comes in some contrast with a report released late in 2024, wherein ADNOC, Microsoft, and Masdar laid out principles for a transitioning to a net-zero energy system, with a focus on efficiency and carbon capture and storage tied to natural gas plants. More recently, ADNOC, Microsoft, and Masdar have described using AI to reduce methane emissions and having Masdar provide renewable energy systems to power Microsoft’s data centers in the region.
Pairing that enthusiasm with the opportunity to invest in the growth of AI infrastructure in the Gulf states and the U.S. is creating a global context for tightly coupling gas with the data center boom — and ignoring clean energy almost entirely. The benefits to the U.S. AI industry are very real: nearly bottomless low-cost investment capital, commitments to purchase GPUs from NVIDIA and AMD, opportunities for U.S.-based hyperscalers to grow market share in the Gulf states, and broad support for scaling the AI infrastructure market in the U.S.
The Gulf states invest in the U.S.
The willingness to invest was welcome news to the gas-friendly Trump administration, which after the conclusion of a tour of Gulf states in May, announced a series of major wins.
He signed a $600 billion deal with the Kingdom of Saudi Arabia, which includes four deals around AI:
- The kingdom’s top colocation developer DataVolt will invest $20 billion in US data centers.
- HUMAIN, a Saudi AI company, announced plans to deploy up to 500 MW of AMD and NVIDIA chips each beginning in 2026, as well as an agreement with AWS to build an “AI Zone” to run services on AWS.
- Google, DataVolt, Oracle, Salesforce, AMD, and Uber together committed to invest $80 billion in technologies in both countries.
- The US and Saudi Arabia signed an export deal for GE Vernova’s gas turbines and energy products, totaling $14.2 billion
In the UAE, Trump signed agreements totaling $200 billion, including one to establish a “US-UAE AI Acceleration Partnership” as well as a five GW data center campus. This follows the visit from the UAE to the U.S. In March, where the Gulf state committed to $1.4 trillion of investment in U.S. infrastructure, including AI.
The week after the president’s visit, OpenAI announced it was partnering with UAE firm G42 to build a one GW data center, called Stargate UAE.
From Qatar, the administration secured what was billed as $1.2 trillion in agreements for economic exchange between the countries, particularly around defense and tech. Specific to AI infrastructure, the Qatar Investment Authority announced plans to invest $500 billion in the US over 10 years, with the majority focused on AI and data centers.
The major players
Looking beyond these recent announcements, the entire Gulf region is actively increasing its investment in AI, both domestically and in the U.S., providing low-cost capital, often from sovereign wealth funds, and a greater risk tolerance. In total, the region has committed over $2.5 trillion to AI and technology investments globally.
Major funds and players active in the region include:
Kingdom of Saudi Arabia
- Alat is a $100 billion fund led by Saudi Arabia’s Public Investment Fund (PIF), which is investing in AI.
- Project Transcendence is another $100 billion initiative devoted to creating a tech hub around AI, analytics, and advanced tech.
- Also backed by the PIF, HUMAIN is an AI startup with plans to build up to 1.9 GW of data center capacity by 2030; it has signed deals worth $23 billion with global tech suppliers, including NVIDIA, AMD, Cisco, Qualcomm and AWS. HUMAIN is also launching a $10 billion venture fund.
- DataVolt, a Saudi Arabian data center company, is targeting the construction of hyperscale AI campuses in Saudi Arabia, the U.S., and global markets. To their credit, they have explicitly said they will power the data centers with renewables and green hydrogen.
United Arab Emirates
- MGX, Abu Dhabi’s technology investment fund, has been involved in a number of partnerships and investment in AI around the world, including a $9.6 billion initiative with NVIDIA, Bpifrance, and Mistral AI to build a 1.4 GW AI campus. MGX has also partnered with BlackRock, Global Infrastructure Partners, Microsoft, and the Kuwait Investment Authority to form the AI Infrastructure Partnership. The partnership’s goal is to mobilize $30 billion of equity capital from investors, with the potential to reach up to $100 billion with the addition of debt financing. MGX has already participated in xAI’s $6 billion funding round, Databricks’ $10 billion round, and OpenAI’s $6.6 billion raise.
- G42, a dominant tech holding company in the UAE focused on AI, recently received an investment of $1.5 billion from Microsoft, and will use Microsoft’s Azure cloud services for its AI services. G42 is behind Stargate UAE, and is also active in the U.S. AI market through partnerships with Cerebras Systems. The company is also building AI data centers in India.
- EDGNEX Data Centers, a Dubai-based developer, has AI data centers under development in the Middle East and Europe. It recently announced a $20 billion expansion into the U.S. market, with an intent to build two GW of data centers over the next four years.
Qatar
Qatar has devoted $2.5 billion to AI projects as part of its Digital Agenda 2030, and inked a strategic partnership with U.S.-based Scale AI to explore AI integration into public services.
Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), announced plans to invest $500 billion in US data centers, AI, and health care technology.
QIA is active in venture capital, not just infrastructure and private equity. It has participated in the funding rounds of AI company Databricks, and Elon Musk’s xAI.
A version of this story was published in the AI-Energy Nexus newsletter on June 25. Subscribe to get pieces like this — plus expert analysis, original reporting, and curated resources — in your inbox every Wednesday.
