To keep ME allies away from Chinese influence: US to establish AI data centres, research hubs in UAE, KSA

ISLAMABAD: In a strategic move, the United States under the administration of President Donald Trump is all set to establish Artificial Intelligence (AI) data centers and research hubs both in Dubai and Saudi Arabia to keep its allied countries away from Chinese influence.

However, US lawmakers are worried about potential chip diversion to China and Russia but proponents highlight strategic advantages versus Chinese alternatives.

Setting up AI data centers and research hubs is a part of the business deal done with the Kingdom of Saudi Arabia and Dubai during Trump’s visit to the Middle East in May, 2025. In response, both the UAE and Saudi Arabia will go for matching investments in the USA in building the AI infrastructure.

Under the agreement with the UAE, and KSA, the US firms will own and run the computer assets in UAE and include provisions to prevent access by restricted entities like Chinese nationals or arms-listed persons.

Both The Wall Street Journal and Reuters confirm that as part of the agreement between the US and the UAE “will fund the build out of AI infrastructure in the US at least as large and powerful as that in UAE”.

A Reuters Breakingviews explainer further notes the UAE’s commitment to invest heavily — more than $1.4 trillion over 10 years, including AI infrastructure in the US.

The US officials and David Sacks, US President Donald Trump’s aide on AI argue that these deals help keep Gulf AI ecosystems aligned with US tech rather than China’s. American cloud companies and hyperscalers will operate UAE compute infrastructure. They also said that the Gulf is offering land, energy, subsidies, and fast-tracked permitting resources US firms need but struggle to access domestically. “Without these overseas projects, Gulf states might partner with China anyway, shifting influence. The US-Gulf AI partnerships aim to lock in long-term American strategic and economic interests.”

The Gulf governments are pledging massive investments ($2 trillion in US), meant to balance the offshored AI compute capacity with reciprocal economic development and R&D.

Building data centers in Dubai and Riyadh gives the US a strategic digital foothold in one of the world’s fastest-growing, high-potential regions. It’s a smart move for both geopolitical leverage and global business growth. Dubai is a regional logistics hub, and Riyadh is building massive digital zones like NEOM and King Salman Park. Massive investment in AI and cloud: Saudi Arabia and the UAE are investing billions of dollars into AI and cloud, digital infrastructure, creating a favorable ecosystem for data centers.

However, the leading Democrats (Warren, Schumer, Reed, and Warner) and Republicans expressed alarm over the decision of Trump’s administration. They cite risks of sensitive chips being diverted to China or Russia, eroding US tech dominance and undercutting domestic infrastructure efforts.

The Biden-era “AI diffusion” rules, which restricted export of advanced AI chips, has now been lifted, allowing hundreds of thousands of Nvidia and AMD chips to be shipped to UAE and Saudi Arabia. They also argue that despite US agreements, Gulf nations maintain strong economic and military ties with China. There’s concern that chips or AI “model weights” could be smuggled, reverse-engineered, or accessed by adversarial actors.

Some say that the Microsoft–G42 deal includes undisclosed security provisions—like “vaults within vaults” and licensing rules to block Chinese access—but critics argue they’re insufficiently transparent and potentially weak.

According to foreignpolicy.com, those who are in favour of the US-UAE and US-KSA deals argue: “If the United States turns away from willing partners like the UAE and Saudi Arabia — nations that have demonstrated a clear preference for the US stack by working with US companies and investing in US AI infrastructure — out of suspicion or through the narrow lens of the democracy-versus-autocracy framework, Washington risks creating a vacuum that China will be quick to fill. Unlike in traditional areas of geopolitical competition, where Beijing has yet to prove that it can replace the United States as a global security provider, technology is a different story. In this area, China has outpaced Western firms, building a global network that offers its stack with no strings attached. Chinese 5G hardware, renewable technologies, electric vehicles, and other mass-produced technologies have already won the global race. The choice, then, is not between trusting autocracies or preserving democratic values; it is between leading the global diffusion of US AI infrastructure or standing idle as the Chinese stack becomes the default.