To transform from an oil-governed economy into a buzzing AI hub, the Gulf has been pouring billions of dollars each year into startups. The first major move in this direction was a $60 billion corpus invested in Masayoshi Son’s first Vision Fund by the Gulf. The yield was slim - perceived as a major blow to the Gulf’s plans.
According to PitchBook, AI startups in the United States saw an investment of $70 billion. China, in the meanwhile, observed an influx of $6.5 billion into its startup ecosystem. However, the total money raised by the AI startups in the Gulf was pegged at $700 million this year.
The numbers are concerning, especially as the region looks forward to becoming an AI hub, yet experts globally are positive about the developments.
“AI could contribute $320 billion to the Middle East by 2030, about 2% of the total global benefits. There’s huge investments going into (AI) in the Middle East,” said Stephen Anderson of PwC while speaking to CNN at the Global AI Summit (GAIN) in Riyadh, Saudi Arabia.
“Here in the region, people were much more prepared to experiment and get involved with AI than maybe some other parts of the world,” he added.
Earlier this year, the UAE announced a $100 billion fund, MGX, that comprises $30 billion of equity by US groups BlackRock and Microsoft as well as Abu Dhabi sources.
MGX is effectively a version of the UAE’s more established $300 billion sovereign wealth fund Mubadala, but it solely focuses on investing in AI companies beyond geographies. Saudi Arabia too has a similar fund of $100 billion USD and is hooked up with Google’s parent company, Alphabet, to build an AI hub in Saudi Arabia.
However, the challenges to the Gulf’s nascent AI dream are still evident. For instance, while Mubadala had an 82% stake in $5 billion chipmaker GlobalFoundaries, the entity failed to supply vital Nvidia-like advanced chips that can be used with data centers to train the most cutting-edge LLMs.
But here’s the thing, despite the challenges, Abu Dhabi and Saudi Arabia have leverage. For instance, while hyperscalers like Amazon, Google, and Microsoft have a fascination for OpenAI’s and Anthropic’s Large Language Models, they still need data centers to build, run, and test their AI models in the region.
On the other hand, the US government is concerned about the Gulf getting closer to China - its rival in the AI race. That tells us what made US hyperscalers invest heavily in the region in exchange for access to NVIDIA chips. A quid-pro-quo.
But the next biggest question now is: What would the Gulf do with so much computing power? How will the region use these massive computing resources? To this, experts have an interesting take.
Abu Dhabi could take a less ambitious step of building a new model. Microsoft-backed OpenAI and Amazon-backed Anthropic already have locked horns and building a new AI model would only imply incineration of resources. Instead, the region could have plans to create content in Arabic. Here is how it unfolds.
Only 1% of content on the web is in Arabic. Training an English LLM and then translating it into Arabic will cost a huge amount. Training LLMs on this content can eliminate Western biases inherent in most AI models and make LLMs accessible to Arabic countries.
Imagine a 400 million Arab-speaking population, with access to technology such as AI and having enough resources to train and build solutions that solve problems of the region.