Saudi Arabia and UAE Lead Middle East’s AI Race

The robust oil economies operating largest sovereign wealth funds are now among the biggest spenders of AI. Recognising the importance of AI and keen on playing a central role in emerging technologies, countries in the Middle East are acquiring emerging AI technologies to be niche AI nations. Rallying to be part of the global conversation on AI, Middle East nations have become the latest entrants to the ongoing AI technology race.

A study by Price Waterhouse Cooper projected that the Middle East region is expected to accrue AI benefits to the tune of $320 billion (2% of global benefits) by 2030¹. The largest gains can be availed by Saudi Arabia which is $135 billion or 12.4% of its GDP followed by UAE¹. Given the magnitude of the benefits, in the wake of the Fourth Industrial Revolution, not to be left behind, UAE and Saudi Arabia are leading the march in investing in AI technologies. Egypt, Jordan, Morocco, and Qatar are joining the brigade.

A recent report in the Financial Times on Saudi Arabia and the United Arab Emirates purchasing thousands of high-performance Nvidia chips for building AI software attests to this new interest². Joining the clamoring demand for Nvidia chips, the leading Gulf countries aflush with funds and resources are even planning to build their own talent pool as well.

Intent on turbocharging their economies by deploying the latest technology, both countries have made no secret of their ambitions to become leaders in AI. Reportedly Saudi has bought 3000 of Nvidia’s H100 chips through its famed research institution King Abdullah University of Science and Technology (KAUST). Pegged at $40,000 each, these processors are among the world’s first designed computer chips for generative AI.

On the other hand, UAE, the first nation to have a dedicated ministry for AI in 2017 secured access to thousands of Nvidia chips already. Embarking on a long-term plan of becoming independent and self-reliant, UAE besides attracting and nurturing computational power and talent, is building its own platforms. The state-owned Technology Innovation Institute in Masdar City, Abu Dhabi, has developed its own open-source Large Language Model, Falcon, to reduce dependence on US or China.

To reduce dependency on oil revenues through diversification under the Saudi Vision 2030 and National Transformation Program 2020, the Kingdom is giving a huge push to the adoption of AI and emerging technologies. In line with its vision, Saudi’s leading research centre KAUST has signed several technology cooperation agreements with institutes and businesses in Shenzen, dubbed as Silicon Valley of China. Currently, Saudi academics is dominated by Chinese demography.

In a testament to its focus on techno-scientific development, Saudi became the first nation to grant citizenship to a robot. In line with this vision, Saudi is also building the futuristic smart city NEOM with cutting-edge technology. Emulating the techno modernism of UAE, Saudi which is a late entrant in adopting the ambitious diversification goal is making rapid strides. Before the 1990s Saudi’s key scientific partners were US, Canada and Taiwan. By the mid-2000s as part of the Eastward Policy, Saudi formalised a scientific and technological partnership with China. This aligned with China’s quest to expand its footprint through connectivity networks in the region.

After the US imposed restrictions on Huawei, China shifted its focus to the Middle East and cemented institutional partnership frameworks with the Saudi market. Saudi has become a major ground for the deployment of 5G networks.

Aflush with funds and resources the Gulf countries are investing heavily toward developing an AI-ecosystem. UAE has launched the ‘Generative AI Guide’ which underscored its commitment to become a pioneer in technology and AI sectors and advocated for a regulatory framework to curb the negative use of technology. UAE developed its own version of ChatGPT in May this year.

Saudi and UAE are now competing against leading companies across the globe for these scarce Nvidia chips. The manufacturer of Nvidia chips is Taiwan’s Semiconductor Manufacturing Company (TSMC) which primarily supplies chips to US companies. Saudi’s KAUST already owns 200 A-100 chips and is going to receive 3000 specialist chips by the end of 2023. Saudi is planning to build a supercomputer Shaheen III, LLM software similar to Open AI’s GPT-4 with Nvidia’s Superchips. This research work is carried out by Chinese AI experts working at KAUST. After the Chinese government stopped them from studying and working in the US many of them moved to Saudi’s KAUST.

Chinese companies Tencent and Alibaba are vying for these scarce chips but the Biden administration sanctions have marred their efforts to obtain the US-made technologies. Through its Saudi collaborations, China is still having its hands on US-made chips.

With a history of government crackdowns in both countries, human rights activists, and journalists are raising concerns over the potential usage of the software for unlawful surveillance against dissidents. Both countries are investing petrodollars reaped following a surge in energy prices last year on AI-enabled technologies. According to a report of the International Data Corporation, the Middle East is estimated to spend $ 3 billion on AI this year and with a year-on increase, it would rise to $6.4 billion by 2026³.

The potential uses of AI are immense, especially in the service sector, retailing, product manufacturing, high-performance computing, data analysis, data security, banking, digital financial services, the health sector, and many more. AI can be put to use for data filtering, facial recognition, surveillance, selective dissemination of propaganda and biased AI analysis raises speculations about its usage to crackdown on political opponents. The autocratic regimes with poor human rights records have raised more concerns about the potential misuse of AI technology.

Authoritarian leaders hold power in the Middle East and with no dearth of finances this continued splurge to acquire and build new technologies is reiterating the need for a regulatory framework to prevent misuse of the technologies by bad actors. UAE and Saudi have unveiled regulatory frameworks devoid of any legislation and a list of dos and don’ts that are legally binding. As new actors join the race, it is inevitable to evolve some regulatory framework to curb the deleterious use of these emerging technologies. It is also incumbent on large companies to build into technology certain guardrails and safety features to thwart the abuse of AI software.

Modelling their cyber centres along the lines of the UK’s prestigious National Cyber Security Centre (NCSC), Saudi and UAE have effectively minimised cyberattacks. According to the Global Cybersecurity Index 2020 rankings, Saudi and UAE are ranked second and fifth out of 194 countries in cyber protection efforts⁴.

The renewed enthusiasm of Middle East nations to leapfrog Western countries and emerge as global leaders in AI is particularly interesting given their record as perennially warring nations. The rapid geopolitical alignments and reconciliation efforts within this region resonate well with their attempts to break the shackles of sectarian conflicts symptomatic of this region. These new pursuits and their raising international stature are something the nations have to watch out for.

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