by Douaa Dridi (Policy Intern at CELI)
The global race for AI influence is afoot in the Middle East with the globe’s two biggest economies engaged in a geostrategic rivalry for technological entrenchment. Previously centred around oil exports and weapons purchases, relations with the Gulf are shifting: “compute, not crude” seems to be the new guiding pillar.[1] In their bid to prove their economic and structural potential to adapt to the shifting global economic landscape, the Gulf region’s nations, primarily, have proven ready to rebrand into a post-AGA economy. From the urgency of climate obligations to decarbonization demands and resource depletion concerns, the new era is proving to be more oriented towards digital resilience pushing the energy-extractive and hydrocarbon-intensive nations of the Gulf to navigate a technological landscape characterized by global power competition while pursuing self-interest and autonomy. Placing focus on the ‘third path,’ this analysis attempts to weigh the Gulf’s potential in achieving AI sovereignty despite hardware vulnerabilities.
Between Washington and Beijing: The ‘Tech War’ Transposed to the Middle East
The present race for AI influence has already set the stage for a world in which two major AI models are pitted against one another in what has been termed the “digital Cold War”[2]: “the Chinese Communist Party’s system and the US-led ‘small ‘d’ democratic’ AI.’”[3] The technological rivalry between China and the US crystallizes most saliently through the “chip war”.[4] This competition presently manifests through “rising trade barriers, competing AI ambitions and a scramble to secure control over data and the digital tools of the future.”[5]
The US-Chinese rivalry has culminated in an increasingly fragmented tech scene wherein the Middle East wider region is emerging as a key player striving to navigate an AI ecosystem divided by “incompatible standards and mutual suspicions.”[6] Striking a balance between collaboration and competition, the Gulf sub-region, primarily finds itself right in the middle of the tug-of-war between the two powers. On the one hand, the Smart City flagship projects underway in the Gulf Cooperation Council’s (GCC) nations have been relying heavily on Chinese technology and investments. As part of its Digital Silk Road, China-GCC strategic AI partnerships have grown steadily in the past years as Huawei invests in the Saudi cloud development, and the Emirati security program “police without policeman,” among other examples.[7]
Trump’s return to office, however, seems to be reconfiguring the world order and the state of techno-diplomacy. In the Gulf, the US is proactively leveraging its “high-performance AI chips” to counteract its competitor’s technological rise. The end of 2025 saw the US’ authorization of the export of 70.000 advanced AI chips to both the UAE based G42 and Saudi Arabia’s HUMAIN[8] soon after the nations severed ties with the Chinese tech giant Huawei and divested from ByteDance.[9] Indeed, the GCC nations evince a proclivity towards bolstering their technological partnership with the US: “our technology ecosystem today …. [is] aligned with US-approved technologies,” underscored Talal Al Kaissi, the group chief of global affairs officer at G42.
This trend has been underway since May 2025 when Trump’s visit to the Middle East showcased emphasis on AI technology signalling efforts of re-entrenchment into the heart of the Gulf’s unfolding digital transformation. Departing with the Biden administration’s AI Diffusion Rule and securing bilateral accords with the three Silicon Sandstorms (the Kingdom of Saudi Arabia, the United Arab Emirates and Qatar), the visit has been considered as evocative of the “old-school power politics and [the] new age of tech offensive” that characterizes Trump’s second term.[10]
Nevertheless, the regional dynamics evince a more convoluted landscape in which the question ‘who is winning the race for AI influence in the Middle East’ is rather reductive for it does not consider the ‘third path’ underway in the GCC, specifically. Notably, looking at the latest developments in the ‘golden tech triangle,’ it is overt that the Chinese, and pre-eminently American investments and exports of vital technology are helping “Gulf allies build end-to-end AI ecosystems that could rival Western digital economies in scale and sophistication.”[11]
The Silicon Sandstorms as Potential Global Arbiters of AI: The Emirati Model
The recent American bold push into this emergent AI frontier is rather embedded in a growing recognition of the ‘third path’ beyond the US-led and the Chinese-led technological spheres. Yet, what does AI (and digital) sovereignty mean for this sub-region?
Among the GCC states, the UAE aptly exemplifies the emergent AI collaboration-competition nexus at play. While it is undeniable, as of January 2026, that the sub-regional technological balance is tilted towards more alignment with the US, the development of the AI generative Falcon-E and Falcon-H models and the LLM Jais are positioning the UAE as a global lever for AI in their own right. The Sheikhdom is, indeed, leveraging its cognitive software autonomy to prove its weight as a strategic partner in the ongoing chip war.
Developed by G42 and The Technology Innovation Institute (TII), Jais and Falcon, respectively, are not simple generative AI tools; their Arabic-centric foundation advances them as catalysers for Arabic-centric AI innovation.[12] The Falcon-H1 is, notably, leading the Open Arabic LLM Leaderboard (OALL).[13] Though their development and maintenance hinges upon the procurement of the high-end American semiconductors – since the GCC states do not produce AI chips – these flagship models are consolidating the AI sovereignty of the UAE and its regional (if not global) position in the AI race.
This apparent proclivity towards the creation of a self-reliant middle path is grounded in the Emirati effort to (1) mitigate the risks of algorithmic colonialism and data bias, and (2) to insulate their technology against the “kill switch” – i.e., the potential of the US to shut off access to advanced AI systems.[14] Furthermore, in their capacity as instruments of sovereign AI – i.e., systems designed, developed and deployed and governed by national institutions to curb reliance on foreign entities – both Falcon and Jais are engendering significant strategic and economic implications that manifest through:
- Representation: unlike US-developed AI models which “are primarily trained and instruction-tuned for English”, these homegrown models are initially trained on Arabic data. Considering thus the underrepresentation of the Arabic language and its sub-dialects in the LLM space in tandem with the inherited biases and social norms of Western models, Jais and Falcon were developed with the aim of reflecting the cultural, linguistic and value system of Arabic-speaking countries departing thus with the digital subalternity in place.[15]
- Regulatory compliance: anchored within local borders, Falcon and Jais are aligned with the centralized legal and cultural structures. For foreign entities and tech giants, this potentially means that tapping into the UAE’s vital AI markets and technology resources will be conditional on their compliance with local standards and benchmarks. The UAE can be, as such, considered a global arbiter for AI.
- Stability: For businesses, enterprises and domestic administrative institutions, these models provide opportunities for the “seamless handling of customer queries in local dialects” enhancing “customer service and operation efficiency” at the domestic level.[16] On the other hand, since they are hosted on sovereign clouds, they provide the UAE with a leverage against hardware vulnerability: for instance, in the case of diplomatic crises, vital applications (such as, in the health sector, banking, energy and defence, among others) proceed uninterrupted.
Looking Ahead: Opportunities in a Multi-Aligned AI Landscape
In terms of AI development, the UAE is considered third in terms of the world’s largest AI developers, behind only the United States and China.[17] Though – with their growing momentum considered – Jais and Falcon are not as widely adopted as global platforms such as ChatGPT or Gemini,[18]their ongoing development and growing availability in 3B, 7B, 34B and now 180B parameter sizes renders them uniquely positioned to respond to diverse infrastructural environments and uses.[19]
Thus, the Emirati model – and by extension, the two other Silicon Sandstorms – exemplify the emergent ‘third path’ in the geo-technological race for AI influence. Beyond the great power competition, these nations are catching up through the strategic focus to excel on a “niche area” that, potentially, renders them indispensable in the present techno-diplomatic landscape.[20] The KSA, Qatar, and the UAE do not meet the full criteria of compute sovereignty: while they possess the prerequisite computing infrastructure (data centres), and maintain ownership and control of the infrastructure, they rely on foreign semiconductor vendors.[21]
Nevertheless, the UAE’s AI models, for instance, provide it with cognitive and jurisdictional autonomy as well as infrastructural resilience in the current AI war. Beyond hardware, the race for AI influence is becoming anchored in the ability to maintain sovereign intelligence. Looking ahead, the resilience of the American-Gulf technological alignment will, undoubtedly, be tested in the upcoming years given (1) the unpredictability of the American foreign policies but also (2) the active Gulf orientation towards multi-alignment diplomacy. GCC nations are, indeed, actively pursuing greater engagement with India, South Korea, Japan, and Türkiye, among other middle powers.[22]
[1] Turak, N., and Kharpal, A. (2025). The U.S’ AI love affair with the UAE isn’t just about access – it’s about dominance. CNBC. https://www.cnbc.com/2025/05/28/the-us-ai-love-affair-with-the-uae-boils-down-to-dominance.html?msockid=18ffd5c51d04634c0adcc6321cad6227
[2] Esposito, M. (2025). AI geopolitics and data centres in the age of technological rivalry. World Economic Forum. https://www.weforum.org/stories/2025/07/ai-geopolitics-data-centres-technological-rivalry/
[3] Turak, N., and Kharpal, A. The U.S’ AI love affair with the UAE isn’t just about access – it’s about dominance.
[4] Miller, C. (2022). Chip war: The fight for the world’s most critical technology. Simon & Schuster.
[5] Esposito, M. AI geopolitics and data centres in the age of technological rivalry.
[6] Esposito, M. AI geopolitics and data centres in the age of technological rivalry
[7] George, R. (2024). The rise of Gulf Smart Cities. Wilson Centre. https://www.wilsoncenter.org/article/rise-gulf-smart-cities
[8] U.S. Department of Commerce. (2025). Statement on UAE and Saudi chip exports. https://www.commerce.gov/news/press-releases/2025/11/statement-uae-and-saudi-chip-exports
[9] Ghosh, I. (2025). U.S gains in AI race as Gulf nations ditch China for Chips. Rest of the World. https://restofworld.org/2025/mideast-us-chip-deal-and-china/
[10] Feakin, T. (2025). Silicon sandstorms: AI, power and the new tech front in the Gulf. Royal United Services Institute. https://www.rusi.org/explore-our-research/publications/commentary/silicon-sandstorms-ai-power-and-new-tech-front-gulf
[11] Feakin, T. Silicon sandstorms: AI, power and the new tech front in the Gulf.
[12] iQuasar. (2025). Harnessing generative AI & Arabic LLMs: How UAE enterprises can innovate with Jais & Falcon 2. https://iquasar-emea.com/blog/jais-falcon2-arabic-ai-innovation-uae/
[13] Warrayat, J. (2026). Abu Dhabi’s TII launches Falcon-H1 Arabic, establishing the world’s leading Arabic AI model. Businesswire. https://www.businesswire.com/news/home/20260105343577/en/Abu-Dhabis-TII-Launches-Falcon-H1-Arabic-Establishing-the-Worlds-Leading-Arabic-AI-Model
[14] Daniel, A. (2026). The case for the kill switch: Why AI needs better brakes? https://www.linkedin.com/pulse/case-kill-switch-why-ai-needs-better-brakes-daniel-ahmed-h76fc/
[15] Sengupta, et al., (2023). Jais and Jais-chat : Arabic-centric foundation and instruction-tuned open generative large language models. Mohamed Bin Zayed University of Artificial Intelligence, UAE.
[16] iQuasar. Harnessing generative AI & Arabic LLMs: How UAE enterprises can innovate with Jais & Falcon 2.
[17] Wichert, B. J. (2025). The Middle East is a new battleground in the race for AI. The National Interest. https://nationalinterest.org/blog/buzz/the-middle-east-is-a-new-battleground-in-the-race-for-ai
[18] Freiha, M. (2025). From TelecomGPT to sovereign AI: How the Gulf is turning connectivity and intelligence into strategic power. Annahar. https://annah.ar/264861
[19] Warrayat, J. Abu Dhabi’s TII launches Falcon-H1 Arabic, establishing the world’s leading Arabic AI model
[20] Rossiter, A. A. (2025). Strategic technology in the Middle East: Gulf States’ place in the AI race. Italian Institute for International Political Studies. https://www.ispionline.it/en/publication/strategic-technology-in-the-middle-east-gulf-states-place-in-the-ai-race-198131
[21] Kasturirangan, R. (2025). Weekly planet 11: On compute sovereignty. https://www.linkedin.com/pulse/weekly-planet-11-compute-sovereignty-rajesh-kasturirangan-umaze/
[22] Kavanagh, J. (2024). The United States and China in a multi-aligned Middle East: A new strategy of American influence. The Institute for Peace and Diplomacy. https://peacediplomacy.org/2024/01/09/the-united-states-and-china-in-the-multi-aligned-middle-east-a-new-strategy-for-american-influence/
