When Donald Trump landed in the United Arab Emirates earlier this year, he wasnt just bringing headlines with himhe came with deals, ambitions, and soft power in the field of artificial intelligence.

The former US president was received with royal honors, but the highlight of the visit was the announcement of a massive AI-focused university campusa joint UAE-US project.

This initiative, described as the largest AI infrastructure hub outside the US, marks the boldest step yet by Gulf countries to cement their position on the global AI map.

Trumps visit coincided with a strategic shift as the White House relaxed export restrictions on Nvidias most advanced chips to both the UAE and Saudi Arabia.

This move signaled how seriously the US considers its Gulf allies as partners in a broader tech alliance.

Gulf states are leveraging their sovereign wealth, geographic location, and abundant oil reserves to position themselves as AI powerhouses. Technology has become central to their plans for reducing future dependence on fossil fuel revenues.

The UAE leads this charge with bold steps, placing data centers at the heart of its strategy. Abu Dhabi announced the development of a massive data center cluster dedicated to OpenAI and other American firms under the Stargate project.

This multi-billion-dollar deal is funded by G42, a state-linked Emirati tech firm spearheading the countrys AI ambitions. Nvidia will supply its latest advanced chips for the project.

Major tech firms such as Cisco, Oracle, and Japans SoftBank are collaborating with G42 in the first phase of development.

Hassan Alnaqbi, CEO of Khaznathe UAEs largest data center operatorsays: Just like Emirates Airlines turned the UAE into a global air travel hub, the country can now become a global hub for AI and data.

Khazna, majority-owned by G42, is building the infrastructure for the Stargate project and currently operates 29 data centers across the UAE.

Both the UAE and Saudi Arabia are racing to host the computing infrastructure needed to train powerful AI models. Compute is the new oil, says Mohamed Soliman, senior fellow at the Middle East Institute in Washington, D.C.

In AI terms, compute refers to the massive processing power provided by advanced chips and large-scale data centersan area into which the Gulf is investing billions.

In todays AI-driven world, infrastructure is the new fueljust as oil powered the industrial revolution.

Soliman notes that Gulf AI firms today aspire to play a role similar to that of their oil counterparts in powering the global economybut this time through compute.

In recent years, Gulf sovereign wealth funds have poured billions into foreign tech companies. But now, they are shifting from passive investors to active players.

In Saudi Arabia, the Public Investment Fund (PIF) has launched a national AI firm called Humain, which plans to build AI factories powered by hundreds of thousands of Nvidia chips over the next five years.

In the UAE, sovereign wealth fund Mubadala has backed G42 and the $100 billion joint venture MGX, which focuses on AI and includes Microsoft as a key technology partneralongside other domestic initiatives.

However, attracting top-tier AI talent remains a major hurdle. To address this, the UAE is offering incentives like low taxes, long-term golden visas, and a flexible regulatory environment to lure companies and researchers.

Building world-class AI and digital infrastructure will act as a magnet for talent, says Baghdad Gras, an AI startup founder and venture capitalist based in the UAE.

Still, the region has yet to produce a globally recognized AI company like OpenAI, Mistral, or DeepSeek, nor does it have a deep bench of elite research talent.

Gras notes that the UAEs small populationaround 10 millionlimits the scale of a domestic research ecosystem.

The Gulfs rise as an ambitious AI player has also drawn the region into the spotlight of US-China tech rivalry.

Trumps visit gave Washington an edge in the regional AI racebut at a cost. In shifting course, the UAE scaled back some Chinese-backed projects and reduced its reliance on Huawei hardware.

The AI-focused deals during Trumps trip reflect the growing strategic importance of this technology in US diplomacy.

For decades, the US-Gulf relationship was built on the formula of oil for security. Today, that dynamic is evolving into a mix of energy, security, and technology.

Soliman of the Middle East Institute says the AI agreements signed during Trumps visit are more about China than the Gulf.

Its essentially an attempt to pull a promising AI regionthe Gulfinto the American AI ecosystem and make it part of Team America, he adds.

The AI stack refers to the full chain of capabilities, including chips, infrastructure, models, and softwareareas dominated by US firms.

Gras says the UAEs choice to partner with the US over China was a rational one: At this point, the Americans are ahead in AI. So it made sense for the UAE to bet on them.

Still, Reuters reported that the Stargate deal is awaiting security approvals, with US officials still concerned about potential Chinese components or personnel in Emirati data centers.

Even so, the project is expected to proceed with growing US corporate support.

Despite Americas current AI dominance, Soliman cautions against underestimating China.

The Chinese are moving fast. They already have an AI stack. It may not be as powerful as the American one, but its cheaper. And for many countries, good enough is all they need.

For now, both the US and Gulf states appear to be benefiting: Washington gains regional allies in its AI race against China, while the Gulf gains a powerful partner in its search for a post-oil economic future.