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UAE, Saudi Arabia emerge as AI infrastructure powerhouses as Gulf bets on long-term growth
BlackRock sees the UAE and Saudi Arabia leveraging abundant capital and energy to become global AI hubs, with digital infrastructure, data centres and advanced manufacturing driving future growth
- PUBLISHED: Wed 15 Jul 2026, 7:00 AM
The UAE and Saudi Arabia are rapidly positioning themselves at the centre of the global artificial intelligence revolution, with massive investments in computing infrastructure, data centres and energy systems creating what BlackRock believes could become one of the world’s leading sovereign AI ecosystems.
Ehsan Khoman, Economist at the BlackRock Investment Institute, said the Gulf’s vast energy resources and deep pools of capital are giving the region a structural advantage at a time when the global AI race is increasingly constrained by shortages of power, infrastructure and computing capacity. “The Gulf has two key structural advantages — abundant energy and abundant capital,” Khoman told Khaleej Times in an interview. “Those advantages have become even more valuable in an AI world where compute, power and infrastructure are increasingly scarce resources.”
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According to Khoman, the UAE and Saudi Arabia are no longer merely investing in global technology companies but are actively building domestic AI capabilities designed to capture a larger share of the value chain. Governments across the region are increasingly treating AI as strategic national infrastructure, spanning everything from sovereign capital and cloud computing to data, foundation models and large-scale compute capacity.
The UAE has been at the forefront of this push. Since the launch of MGX in 2024, the country has strengthened its AI ecosystem through entities such as G42, Khazna and Falcon. Khoman said this strategy culminated in the announcement of Stargate UAE, a planned one-gigawatt AI compute cluster that forms part of a broader five-gigawatt AI campus.
Saudi Arabia is pursuing a similar path through HUMAIN, its national AI champion. The Kingdom has partnered with global technology firms including NVIDIA, AMD, Qualcomm and AWS to build cloud infrastructure, AI factories and Arabic-language foundation models, reflecting growing competition among Gulf economies to secure leadership in emerging technologies.
“The key takeaway is that the GCC is increasingly focused on owning the infrastructure that powers AI,” Khoman said. “On that measure, the region is positioning itself as one of the world’s leading sovereign AI hubs.”
Beyond AI, BlackRock sees significant opportunities emerging from a broader wave of economic transformation sweeping across the region. Governments are investing heavily in nation-building programmes aimed at diversifying their economies and reducing dependence on hydrocarbons.
Khoman identified advanced manufacturing, logistics, energy infrastructure and digital infrastructure among the sectors best positioned for long-term growth. However, he believes AI-related investments will remain the standout opportunity as demand for computing power, cloud services and data storage continues to accelerate globally.
“The biggest opportunity, however, is AI and digital infrastructure,” he said. “The region is rapidly expanding its digital ecosystem. There are already more than 230 data centres across the Middle East, and that number is only likely to grow.”
BlackRock also expects private capital to play a growing role in supporting the region’s development ambitions. Infrastructure projects linked to energy, transport and digital networks are expected to attract increasing investor interest as governments seek partners to help finance long-term growth initiatives.
Looking ahead, Khoman remains optimistic that the AI investment cycle still has considerable room to run despite concerns about technology valuations. “Our view is that the next phase of the AI story is what we call physical AI,” he said. “The opportunity extends well beyond software.”
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.