The UAE and Saudi Arabia are determined to boost their technology sectors by investing in semiconductor and AI capabilities, as per technology experts. Both countries have revealed major plans for AI and semiconductor installations and production. While spending on AI-led facilities is being delayed by US export regulations, traditional datacentres run by Alibaba Group Holding Ltd and Amazon.com Inc are already operational. Imports of servers, computers, and storage systems in the region have decreased by 7.0% year over year, prompting a potential shift towards supplies from China and Hong Kong.
The recent meeting between leaders of the UAE and the US highlighted key areas like artificial intelligence, renewable energy, climate, and space. The UAE Ambassador to Washington, Yousef Al Otaiba, mentioned that the UAE is excelling in advanced technologies and artificial intelligence, closely aligning with the US. OpenAI CEO Sam Altman has also praised the UAE for its potential as a global “regulatory sandbox” for testing artificial intelligence, with Microsoft making a significant investment in the UAE’s top AI firm, G42.
The UAE’s strategic focus on US technology and AI is evident through partnerships with companies like BlackRock, Global Infrastructure Partners, Microsoft, and the Mubadala-backed MGX investment company. The Global AI Infrastructure Investment Partnership aims to drive future economic growth in the UAE. However, competition for chip supplies from global hyperscalers is a challenge for AI datacentre developers, as capital expenditures are expected to rise significantly in the coming years.
Both the UAE and Saudi Arabia are positioning themselves to become chip manufacturing hubs, with Saudi Arabia forming a strategy with Foxconn Technology Group and the UAE’s sovereign fund co-investing in GlobalFoundries Inc. These efforts are in competition with major players like the US, the EU, and Japan to attract new investments in the technology sector. Access to manufacturing machines is another challenge, with mainland China accounting for a significant portion of global imports, although delays in European projects may offer an alternative source of supplies.
In conclusion, the UAE and Saudi Arabia are making significant strides in expanding their technology sectors through investments in semiconductor and AI capabilities. Despite challenges related to US export regulations and competition for chip supplies, both countries are pushing forward with plans to attract investment and become key players in the technology industry. The strong strategic partnerships with global companies and the focus on advanced technologies indicate a promising future for the region’s technology sector. As investments continue to pour in and advancements are made in AI and semiconductor production, the UAE and Saudi Arabia are well-positioned to lead the way in technological innovation in the Middle East.
