Can AI Replace Oil as The UAE’s Sustainable Export Strategy?

With AI reshaping global markets and fossil fuels in structural decline, Gulf nations are now rethinking their future economic base.

In a region historically tied to oil exports, the search is on for a sustainable alternative and AI may be the answer.

"Compute is the new oil," says Mohammed Soliman, Senior Fellow at the Middle East Institute in Washington DC.

His phrase captures how the Gulf's next major export may not be a natural resource, but a digital one: large-scale processing power supported by advanced chips and purpose-built data centres.

This shift is more than a technological rebrand.

It’s a potential transformation of the Gulf’s economic model, one that seeks long-term viability by transitioning from carbon-heavy exports to energy-intensive but lower-emissions infrastructure.

Digital infrastructure as a sustainable foundation

The region is well-positioned to build on this momentum.

With deep financial resources and well-established infrastructure, Gulf states are actively developing AI ecosystems that could serve both regional demand and global markets.

One of the largest commitments came earlier this year when Donald Trump visited the United Arab Emirates (UAE) and announced a US$100bn investment in digital infrastructure.

At the heart of this investment is Stargate, a new AI campus co-developed by the UAE and the United States, positioned to be the largest AI infrastructure hub outside North America.

Funded by state-linked tech firm G42, the Stargate campus in Abu Dhabi will house data centres for OpenAI and other US companies.

Key players include Nvidia, which will supply high-end chips and tech firms Cisco and Oracle, which are delivering the first phase of development. Japan’s SoftBank also joins as a major partner.

Hassan Alnaqbi, CEO of Khazna, the UAE’s largest data centre operator, likens this shift to earlier strategic bets: "Just like Emirates helped turn the UAE into a global hub for air travel, now the UAE is at a stage where it can become an AI and data hub."

Khazna, majority owned by G42, already operates 29 data centres across the UAE and will manage large parts of the Stargate infrastructure.

The emphasis is not only on digital growth, but on enabling an industry that uses less fossil fuel while powering low-carbon services.

Regional transition toward sustainable digital exports

Saudi Arabia is pursuing a similar path. The country’s Public Investment Fund has launched Humain, a national AI company aiming to construct AI factories using several hundred thousand Nvidia chips over the next five years.

Mubadala, the UAE’s state-owned investment firm, has backed both G42 and MGX, a US$100bn AI joint venture with Microsoft as its lead technology partner.

This signals a clear pivot. Once passive investors in international technology, Gulf sovereign funds are now building platforms to export digital services themselves.

From a sustainability standpoint, this strategy supports long-term decarbonisation.

While data centres are energy-intensive, they can be powered by renewables.

The shift also offers new employment and economic diversification opportunities outside the oil and gas sector.

Attracting talent remains a key challenge. To address this, the UAE has reintroduced long-term "golden visas" and regulatory incentives to lure overseas companies and researchers.

"Building world-class digital and AI infrastructure will act as a magnet," says Baghdad Gherras, Chief Data Officer at Medad Holdings LLC.

Still, challenges remain.

The region has yet to produce an AI company on the scale of OpenAI or Mistral.

A shortage of high-level research talent will also make it harder to sustain innovation in the short term, though investment continues at pace.

Sustainable alignment and geopolitical consequences

The Gulf’s embrace of AI is also changing its geopolitical position.

As Trump’s visit demonstrated, the region’s digital pivot has been aligned closely with US strategic interests.

"It's basically us trying to bring a promising, rising AI region, which is the Gulf , into the American AI stack, to be on Team America AI," explains Mohammed Soliman.

This "stack" refers to the full technological pipeline, from semiconductors and servers to models and software, most of which are controlled by US companies like Nvidia.

Aligning with this pipeline may bring technological advantage but also raises new dependencies.

As energy transitions go, compute is still a high-energy commodity, but it lacks the environmental drawbacks of fossil fuels.

AI infrastructure can be paired with solar or nuclear power, especially in countries with vast desert areas and existing investment in renewables.

"At this stage the Americans are ahead in the AI game. So, it made sense for the UAE to bet on them," Baghdad says.

For Gulf states, this shift offers a route to economic sustainability: exporting digital power, reducing reliance on fossil fuel revenues and building a more diversified, lower-carbon economy.