July 31, 2025 | 09:45 IST, The United Arab Emirates and the Kingdom of Saudi Arabia are intensifying their efforts to become global leaders in artificial intelligence by investing significantly in AI-focused initiatives and strengthening strategic partnerships with the United States. According to a recent BBC report, both Gulf nations are aligning their long-term economic diversification strategies with technological transformation, placing artificial intelligence at the core of their future economic vision.

As part of this broader objective, Saudi Arabia’s sovereign wealth vehicle, the Public Investment Fund (PIF), is reportedly planning to launch a dedicated artificial intelligence investment fund valued at approximately USD 40 billion. This initiative marks one of the most ambitious efforts to date by a Middle Eastern nation to develop a globally competitive AI ecosystem. The fund is expected to support AI infrastructure, talent acquisition, algorithm development, and strategic mergers and acquisitions in the sector.

Parallel to Saudi Arabia’s initiatives, the UAE is making substantial strides in advancing its AI capabilities through its flagship AI firm, G42. The company has significantly expanded its collaboration with leading United States-based technology firms, notably securing a USD 1.5 billion investment from Microsoft. This move is seen as a key milestone in deepening cross-border technological cooperation and facilitating knowledge transfer in advanced computing and cloud infrastructure.

These developments underscore a growing competition between the two Gulf economies to attract global AI talent, secure computational infrastructure, and establish leadership in the international AI landscape. Both nations recognize AI as a transformative force that not only enhances productivity and operational efficiency across sectors but also contributes to long-term economic sustainability and global influence.

The United Arab Emirates and Saudi Arabia are also prioritizing the creation of favorable regulatory environments, digital innovation hubs, and academic research partnerships to support AI growth. Their collaboration with the United States is intended to leverage American expertise in foundational AI models, semiconductor development, and cloud services, thereby accelerating the Gulf region’s transition into a technology-driven economic model.