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Business Daily
UAE - the next AI powerhouse?
00:17:29
We find out how the country is navigating the US-China tech rivalry
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Learn more@concur.com We've had seismic changes in the last decade and we've adapted to them. But what comes next? We really talk about autonomous business processes rather than just automating business processes. I'm Chip Clinicsel, host of Resilient Edge, a business vitality podcast paid and presented by Deloitte. Our latest episode explores how to build a digital brain and future proof your business vision to value on Resilient Edge is available now wherever you listen to podcasts. Hello and welcome to Business Daily from the BBC World Service. I'm Sameer Hashmi. All this week we are looking at how artificial intelligence, or AI, is changing the business world. And today we are focusing on the United Arab Emirates, which is setting its sights on becoming the next AI powerhouse.
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UAE now is at the stage where it can be a data hub as well, and it can be an AI.
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Hub involving closer relations with the United States.
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How can you balance between your energy trade with China, which is extremely important, and your technological and military and defense ties to the United States?
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And we'll be looking at the potential issues that could stand in the way of quick growth.
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They think that obviously the UAE as a country is small, roughly 10 plus million inhabitants is not considered as enough.
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The UAE's AI ambitions all coming up in today's Business Daily. When US President Donald Trump arrived in Abu Dhabi earlier this year, he received a royal welcome at Al Wathan Palace. Women in flowing white dresses lined the walkway, flipping their long hair in unison. A traditional Emirati dance known as Al Ayala men added to the rhythm with drums and chants as President Trump walked alongside the UAE's President, Sheikh Mohammed bin Zayed Al Nahyan. It was the first visit by a sitting US President to the United Arab Emirates in nearly two decades. But the centerpiece of the visit came a few hours later yesterday.
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The two countries also agreed to create a path for UAE to buy some of the world's most advanced AI semiconductors from American companies. A very big contract. This will generate billions and billions of dollars in business and accelerate the UAE's plans to become a really major player in artificial intelligence.
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President Trump and Sheikh Mohammed unveiled the first phase of a sprawling new AI campus, a joint UAE US initiative billed as the largest AI infrastructure hub outside the United States. It marked the Gulf's boldest move yet to place itself at the heart of the global artificial intelligence map.
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Welcome to the new epicenter of innovation.
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Where American ingenuity meets Emirati vision and abundant energy. Huge progress. The multi billion dollar project is known as Stargate, a vast cluster of data centers designed to power AI systems developed by OpenAI and other US firms. It's been bankrolled by G42, an Emirati state linked tech company that's become Central to the UAE's AI ambitions. Nvidia will supply its most advanced chips. Tech giants like Cisco, Oracle and Japan's Softbank are also involved in building the first phase. The Gulf states, particularly the UAE and Saudi Arabia, are leveraging sovereign wealth, energy advantages and strategic geography to become AI powerhouses. Technology and AI are key pillars of their plans to diversify their economy away from oil. And data centers lie at the heart of their strategy. The UAE's biggest data center operator, Hasna, is building the infrastructure for Stargate. The company's CEO is Hassan Al Naqabi.
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If you look at where we have been some years ago and how UAE actually established itself to become a hub for not only for the data business, but for the entire ecosystem, whether it's transport, whether it's logistics, and we've seen how Emirates Airline has played a big role in making sure that UAE is actually a place where transport is actually being used to transfer passengers from one point to another. And that's basically where the idea of hub came from. UAE now is at the stage where it can be a data hub as well, and it can be an AI hub. And I think the idea of UAE and the leadership when Hezna was established is actually to bring an infrastructure that can enable. And we know that with the AI coming in and with the data playing a big part of, of the economy and actually probably creating its own economy, I think it's important to have an infrastructure.
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How crucial are data centers when it comes to building an ecosystem for AI?
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If I go back in time, and I think three, four years back, it was very hard for me to explain to my family and my friend what I do as a business and data center was not really something everyone knew about, but I think With AI coming in, we have seen a completely shift in the awareness of people about this business. Probably somewhat negative and somewhat positive as well, but I think we look at it as the foundation layer because it is the actually infrastructure that enables digital economy to evolve. Without the data center, there will not be any cloud adoption, there will not be any AI adoption.
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I want to talk about President Trump's visit, which was in the month of May. The UAE is now building, along with the United States, the largest AI campus outside the United States. And then there was this announcement about the Stargate, which Hasna is part of. How's that going to really play out as far as the AI capability goes for the UAE and the region?
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The 5 gigawatt cluster AI cluster that was announced during the President Trump visit, I think this has been in the making for quite some time. First of all, we believe as a company and as a group that AI should not be, let's say, limited to one nation or to one jurisdiction, because it has to work when you have multiple hubs that are interconnected together, just like the Internet. And I think what makes UAE unique in the sense how we actually establishing this is we have the land, which is an important factor. Second, we have the energy. And what's really important is not just the energy, is the mix of energy. And I think our 5 GW target, or let's say AI cluster project is actually provided with a clean energy. And if you look at UAE geographically, I think it sits within a very unique position, having access to multiple destinations. You can access about 3, 3 billion population. And that's really important because if you want to set up an AI cluster that actually distribute and export AI into closed nations, you need to have connectivity, you need to have lower latency to these nations. So that's an important factor. And I think the most important factor is talents. And I think UAE has managed to gain the trust of the talents on a global scale. We've seen a lot of migration happening and then of course, the partners, an ecosystem of partners that will help you actually bring value within this AI cluster. We've seen G42 partnering with the like of, you know, OpenAI, Nvidia, Oracle, Cisco and SoftBank. So that's basically what makes it important.
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You're listening to Business Daily from the BBC World Service.
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I'm Sameer Hashmi and today we are in the UAE as it starts an ambitious charge to become a big player in the AI sector. Gulf sovereign wealth funds have poured billions into global tech giants over the past decade, but now they are pivoting from passive investors to active players in the AI race. The Gulf states also have a unique geographical advantage. They lie at the crossroads of Asia, Europe and Africa, where major undersea Internet cables and global data tariff intersect. It's this positioning that makes Gulf based data centers increasingly strategic. I'm inside one of the data centers operated by Hasna. It's located in Dubai. This particular facility is used by a major tech company to power a part of its AI and cloud operations. And right now I'm walking through the cooling corridor where there are these giant air conditioners or cooling systems as they are known and they're working hard to keep the temperatures down. Across this corridor is the massive data hall that hosts rows and rows of black server racks. We are not allowed to go that side due to security reasons, but this data center is an example of the UAE's ambition. In today's AI driven economy, infrastructure is the new fuel, much like oil was during the industrial age. But While ambition is sky high, challenges remain. The region has yet to produce a globally recognized AI company like OpenAI, Mistral or Deepseek. The other major challenge is a shortage of skilled AI talent across the region. Baghdad Garas is founder of a UAE based AI startup and a tech venture investor.
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The reality is that talent is a challenge for everyone when it comes to AI, It's a global competition. That being said, I will say that the best, the best way to attract talent is to actually become an AI center, right? Meaning that you should have the compute and the digital infrastructure infrastructure that will enable AI engineers to come. Right? Because at the end of the day, if you know you are smart guy and you have an amazing idea, but in the country you live, you don't have the possibility to run AI model at scale. You will need to move wherever it's possible. Another thing obviously is immigration. So it's very easy to move, move to the UAE right now. You have the golden visa and they are really trying to make as smooth as possible the movement of people in the uae. The UAE is, you know, this, this new Switzerland, right.
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Thailand is one key issue. Do you see any of the major challenges that the UAE needs to address?
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I would say one of the challenges that people, you know, have in mind when it comes to the UAE is they think that obviously the UAE as a country is small. Right? So most of the time when, you know, we talk about countries like China, like us, you know, there is a vast population and therefore, you know, there's a market opportunity by itself.
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Right.
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I think that when people see the UAE as, you know, roughly 10/million, you know, inhabitants, it's not considered as enough. Right. The reality is the UAE is a hub and people should consider it as a gate to the Middle east of Africa or India, by the way. But the geography might be also the number of inhabitants might be considered as a limitation.
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So far we have seen that the government is driving investments or even playing a key role in building the ecosystem for AI. But so far we haven't seen any active participation from the private sector or the startup industry in the region. Are there enough opportunities for them initially?
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Probably what you need is a massive support from the public sector, namely the government, to actually unlock those resources. Because private sector might not be able to go across the entire value chain and the return on investment takes some time on those physical infrastructure. I think that once, once those infrastructure will be in place, it will unleash a huge amount of opportunities for the private sector internationally. Imagine that you are startup in Africa Imagine that you are in Central Asia or you are in Southeast Asia. The UAE can represent for you the home of innovation. It will be probably the center in which you will have access to capital to raise fund, you will have access to technology, you will have access to probably one of the best environment to live and thrive in, AI. The private sector will play a very, very strategic role very soon and probably most of the value creation will come from the private sector.
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The rise of the Gulf as an ambitious AI player is pulling the U. S China tech rivalry into the desert. Donald Trump's visit gave Washington a strong lead in the region's AI race, but not without trade offs. As part of its strategic pivot, the UAE has scaled back several China backed tech projects and reduced its reliance on Huawei hardware. The White House eased restrictions on exporting Nvidia's most advanced AI chips to both the UAE and and Saudi Arabia, a move that signalled just how much the US now sees its Gulf allies as partners in a broader technological alliance. For decades, the US Gulf relationship was shaped by oil and security. Now technology has emerged as a new pillar. Mohamed Solomon is an expert on AI and geopolitics at the Middle East Institute.
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In Washington D.C. we are now in a moment of great power competition between the United States and China. And this competition is going through all aspects of global economy, let alone security. And the Gulf is in a very interesting and difficult position. The Gulf is a main energy exporter for all the Asian economies, China chief among them. In the same time they have historical and strategic relationship with the United States that goes back since 1940s, 1950s. So what's the balance? How can you balance between your energy trade with China, which is extremely important, and your technological and military and defense ties to the United States? One of the things that I have seen in D.C. in the past few years that we perceive any sort of relationship between China and any country as a threat. This is, I think, unrealistic way of thinking about that. We should make sure that we are able to create guardrails around the way our technology partnership with the Gulf should be. And we should use this model with other countries.
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As we see this tech battle evolving between the United States and China, it seems pretty evident at this point of time that the US has got a massive edge. How could this actually play out when it comes to the AI landscape going ahead?
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I don't want to be this guy who underestimate China. I think China has massive edge, which is the techno industrial base that they have. They're able to Scale up. We have a scale problem when it comes to US and China. China is able to scale and produce more at scale and quicker than the United States. Where I've seen this in solar panels, I've seen this in electrical vehicles, we have seen this in batteries. And I know that there is a consensus, especially in Washington, that China's far away. I don't believe I subscribe to that sort of consensus. I believe China, because of the scale advantage they bring, they're able to scale up quickly and the moment they're able to cross the threshold when it comes to the parity with us on chip quality, I wouldn't discount them. Catch it up also in quantity and offering a full AI stack. Actually, they have been starting to offer AI stack.
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Do you see countries having to choose between the US and China?
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This is the moment today where the United States is leading and the American stack is the most dominant stack. Right. Today is for us to build those sorts of partnerships, those AI infrastructure, because those infrastructure are going to be foundational to these sort of tech alliances. Partnerships we're going to call that. The point is those AI deals with the Gulf are more about China than about the Gulf. It's basically us trying to bring a promising rising AI region which, which is the Gulf, to the American AI stack to be on Team America. AI.
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In this unfolding AI race, the US gains strategic allies in a bid to outflank China, not just in chips and compute, but in global influence. And for the Gulf nations like the UAE and Saudi Arabia, the partnership offers something just as valuable. A powerful ally in their search for a post oil economic future. In a region long shaped by energy, a new kind of power is being brokered. It is measured not in barrels, but in bites. That's all for this episode of Business Daily, produced and presented by me, Sameer Hashmi. In tomorrow's program, Sam Grue investigates how parts of the news media are embracing AI, while others fear the technology could contribute to disinformation. Online.
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