The Gulf’s $100 billion investment in AI is only beginning.

In early 2025, OpenAI CEO Sam Altman made a trip to Abu Dhabi to engage in discussions with AI fund MGX. This meeting marked a significant change in the world of technology finance.

MGX, a newly formed organization backed by the tech fund G42 and the sovereign wealth fund (SWF) Mubadala, has teamed up with BlackRock and Microsoft to create the Global AI Infrastructure Investment Partnership. This initiative, focusing on infrastructure, core technologies, and their supply chains, plans to invest up to $100 billion over the coming years, primarily in the United States.

Additionally, MGX revealed its involvement in the ambitious Stargate project by the US government in early 2025, alongside partners like SoftBank, OpenAI, and Oracle, which aims to mobilize $500 billion towards AI infrastructure investments by 2029.

In a short span, the sovereign wealth funds of the Gulf Cooperation Council (GCC) have positioned themselves at the center of global AI financing, utilizing their considerable capital to create a competitive edge both domestically and internationally.

Beyond just financial returns, this initiative aligns with national strategies for economic diversification. With aims to have AI contribute notable percentages to their GDPs—Saudi Arabia targeting 12 percent by decade’s end and the UAE aspiring for a remarkable 40 percent by 2031—Gulf countries see AI as crucial for a future beyond oil.

The SWFs, including major players like the Qatar Investment Authority (QIA), Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi’s Mubadala and ADQ, as well as Adia-linked funds, are leading the charge in realizing these ambitious visions. They are prepared to make substantial investments in high-risk AI projects while simultaneously advancing cutting-edge technology within their own borders.

Their strategy capitalizes on their expanding global presence and investments to remain competitive in the fast-changing AI field. The scale and significance of recent deals are indicative of this trend.

Take for instance PIF’s collaboration with Google for a major data center, AWS’s multi-billion-dollar investment in Saudi Arabia, and QIA’s interests in generative AI companies like Cresta and Elon Musk’s xAI. Abu Dhabi’s approach encompasses G42, MGX, and institutions like Mohamed Bin Zayed University (MBZUAI) and Adia Lab.

These partnerships draw on local benefits, such as available land and lower energy costs, while granting Gulf states access to essential infrastructure and technological expertise.

Beyond the objectives of diversification and financial gain, the motivations are multifaceted. SWF investments in foreign ventures can serve as a channel to acquire new technologies for domestic application, potentially revolutionizing governmental operations, oilfield management, infrastructure, and healthcare.

Moreover, there is a strong incentive tied to security and privacy, particularly the development of infrastructures designed to keep sensitive data within national territories rather than depending on foreign data storage solutions.

However, this bold transition comes with considerable risks, the most significant being the rapid pace of technological progress.

AI technology is advancing so swiftly that it can render investments outdated within months, even amidst extremely high valuations. The debut of China’s DeepSeek chatbot in early 2025, for example, led to a staggering $600 billion drop in the stock value of chip manufacturer Nvidia, in which several Gulf SWFs have investments.

Not every early-stage AI company will succeed; many will falter or be eclipsed. Historical data on tech investments also serves as a warning, with some significant past investments resulting in negative returns.

The situation is further complicated by growing geopolitical tensions, especially between the US and China, which renders technology and data access significantly sensitive.

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There are concerns in the US regarding ties between GCC entities and China, which could potentially result in trade restrictions or export controls that might isolate certain SWF investments.

In spite of these challenges, Gulf SWFs are placing their bets on AI as a major financial and strategic opportunity, promising tangible socioeconomic gains.

As the AI sector continues to grow and consolidate, we can expect a clearer differentiation of strategies and a more discerning approach to investments, potentially facilitated by AI itself.

The Gulf’s high-stakes AI investment is already underway, positioning billions at the forefront of global technological evolution. The results are yet to unfold, but the ambition is unmistakable.

Julie Kassab is the sovereign wealth fund leader at Deloitte Middle East