The Gulf Cooperation Council (GCC), led by Saudi Arabia and the UAE, is pouring massive financial muscle into artificial intelligence as part of a bold plan to diversify beyond oil. On the surface, the stakes are astronomical: AI could contribute an additional USD 150 billion to the regional economy, a potential GDP game-changer. But beneath the hype lurk critical challenges of talent scarcity, educational gaps, and governance shortfalls that risk derailing the grand vision.
From Sovereign Funds To AI Powerhouses
Saudi Arabia’s Humain, launched May 12, 2025, by Crown Prince Mohammed bin Salman through the Public Investment Fund, aims to drive global AI innovation from Riyadh. Leveraging top-tier partnerships with Nvidia, AMD, Qualcomm, AWS, Cisco, Amazon and Supermicro, Humain plans vast data centres, GPU farms, and a cutting-edge Arabic large-language model. It’s positioned to accelerate the kingdom’s pivot under Vision 2030.
In Abu Dhabi, MGX, established in 2024 by Mubadala and G42, has its sights set on managing USD 100 billion AI investments. It has already launched programmes focusing on data centres, and cross-border infrastructure, and took part in OpenAI’s Stargate data centre project. Recently it made waves by joining BlackRock, Microsoft and others to underwrite global AI infrastructure finance.
The headline sum is staggering and real. Still, we must ask: where is the regional spill-over, especially in terms of the supply of home-grown talent?
Obstacle Course Ahead
Talent crunch remains a major hurdle. Gulf nations still heavily rely on foreign expertise. Education systems, although improving, lack the depth to produce large cohorts of AI developers, machine learning researchers, and data scientists. Regulation is another weak link. AI regulation remains underdeveloped.
Data privacy, liability, and bias today pose future risks. Without robust frameworks, investment is directionless. Infrastructure limits also present challenges. Many projects focus on building data centre capacity, but ignore supporting infrastructure such as national computing grids, high-speed connectivity, and carbon-friendly energy for scalable deployment.
Past diversification efforts in tourism, petrochemicals, and non-oil sectors have yielded mixed results. AI is the next frontier, but structural transformation is messy and slow. Investing in people must become a cornerstone. Gulf governments must massively upscale AI education. Deep public-private partnerships, scholarships, retraining programmes, and incentives for local innovation are the lifeblood of a regional talent pipeline. Regulatory frameworks must catch up.
Establishing regional AI regulatory bodies to oversee ethics, intellectual property, and data sovereignty, ideally aligned with global standards, will foster broader adoption and international cooperation. Infrastructure should be unified and future-ready.
Gulf leaders should consider pan-GCC cloud and data centre alliances to leverage economies of scale, using carbon-neutral power sources to transcend fragmented efforts. Ultimately, AI must be integrated into real-world sectors. It should show tangible impact in oil and gas efficiency, smart city systems, healthcare, logistics, and finance. Translation to productivity and value is key.
If the Gulf approaches AI with the rigour and patience of a national development strategy, the payoff could be immense: a leap to knowledge-economy status. If not, the region could find itself stuck, rich in data centres, poor in outcomes.