Trump Is the US’s New AI Salesman in the Middle East. A Smart Move or Desperation?
Key Takeaways
- The US has signed a deal with the UAE to build the largest AI data center outside of the US.
- UAE will also be able to acquire 500K advanced NVIDIA AI chips every year from 2025.
- Saudi Arabia AI firm HUMAIN announced a partnership with NVIDIA to build 500 MW of AI factories in the next five years.
Donald Trump’s visit to the Middle East has turned out to be quite fruitful for both parties. The US has signed a new deal with the UAE, wherein ‘the Middle East powerhouse’ will build a 10-square-mile AI facility in Abu Dhabi with a power capacity of 5 gigawatts.
Remember, this kind of power can support 2.5 million Nvidia B200 chips. The facility will be built by Emirati government-backed AI company G42. This is the same company in which Microsoft invested $1.5 billion last year.
However, the US seems to be cautious about the deal and would control a large part of the facility, even after it’s operational. Howard Lutnick, the US Secretary of Commerce, said that American companies will operate the data center and offer cloud services through the Middle East.
This agreement would also allow the UAE to import 500K advanced Nvidia AI chips every year starting as early as 2025. Nvidia CEO Jensen Huang also accompanied Trump on his visit.
Additionally, the agreement requires the UAE to reposition their national security regulations with the US, considering the country’s strong trading ties with China. This is important to prevent any diversion of US technology to other countries, specifically China.
Recently, during Trump’s visit to Saudi Arabia, the country unveiled HUMAIN, an AI firm that is part of the country’s public investment fund. HUMAIN recently announced a landmark deal with NVIDIA, planning to build AI factories with a total capacity of 500 MW in the next 5 years, which will run on millions of NVIDIA GPUs.
These AI data centers will become launchpads for training and deploying AI models on a larger scale. Saudi Arabia wants to become an international AI powerhouse to drive the next wave of AI development in the Middle East, and its partnership with NVIDIA might just be the beginning.
AI Shaping Geopolitical Ties
The Middle East has been trying to ramp up its AI investments and efforts in recent years. For instance, the UAE hired Eric Xing, a pioneer AI researcher, in 2020 to lead the Mohamed bin Zayed University of Artificial Intelligence. Following this, Saudi Arabia roped in Jürgen Schmidhuber, another AI pioneer, to head its King Abdullah University of Science and Technology.
However, the quality of AI research from these countries has been subpar so far when compared to China and the US. This is largely due to restricted access to advanced computing resources. That could quickly become a thing of the past, though, thanks to the new deal with the US.
The Middle East seems to be standing at an important crossroads. While it needs to maintain its trading ties with China, it cannot sever US relations owing to the latter’s AI supremacy. As of 2023, China accounts for around 11% of the UAE’s total exports, valued at $41.8 billion. At the same time, it also accounts for 20% of the country’s imports at $77.42 billion.
A powerhouse like the UAE is not dumb enough to ditch China to please the US. Therefore, this deal will be a meticulously planned affair from both countries. While the US will ensure the AI chips do not end up in China, the UAE will be cautious not to ruffle China.
Trump Exploring New Markets
The US has also shown a lot of trust in the Middle East with this deal. Earlier, such deals were blocked by the US administration, citing the Middle East’s close connections with China. However, Trump has been quick to realize that he needs to tap the potential of the ‘oil money’ to stamp America’s authority over artificial intelligence.
Another reason behind the US’s interest in the Middle East could be that it has blocked the Chinese market for manufacturers like Nvidia and AMD. In fact, a new law is under discussion that could require US companies to introduce location tracking in exported AI chips so that they do not end up in the hands of their Chinese counterparts.
These strict measures will eventually lead to a total loss of Chinese markets. Also, note that China contributed 13% of Nvidia’s total revenue for the year ended January 2025. So, the US-Middle East deals could also be a desperate move by the former to find new markets for its huge AI production units.
Also, Trump doesn’t seem to have many options. After exiling the Chinese markets, the Middle East is the biggest emerging AI producer and consumer globally. Other strong candidates like India haven’t shown much interest in AI technological developments, at least not until the time of writing.
What’s more, the South American market may not be enough to cover for loss in Chinese revenue. So, in all probability, it seems like the US needs this deal more than the Middle East.
The Middle East, on the other hand, also seems to be in the mood to redefine traditional partnerships through strategic investments and diplomatic tools, creating a win-win situation for both parties.
Mohammed Soliman, a senior at the Middle East Institute, said that this shift will improve the country’s technological partnership with the US. However, this does not mean that the UAE is abandoning China – it’s just recalibrating its tech strategy to prepare for the future.
Krishi is a seasoned tech journalist with over four years of experience writing about PC hardware, consumer technology, and artificial intelligence. Clarity and accessibility are at the core of Krishi’s writing style.
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