Beyond Silicon: AI as the New Currency of Geopolitical Competition

The Gulf states, traditionally known for their oil wealth, are now channeling investments into AI infrastructure. Saudi Arabia's multibillion-dollar chip deal with Nvidia through its new entity, Humain, and the UAE's plans to build one of the world's largest data centers in collaboration with the U.S. government signify a strategic pivot towards sovereign AI development. These initiatives underscore a broader realignment where AI is perceived as a cornerstone of national competitiveness.

Nvidia has emerged as a pivotal player in the AI ecosystem, supplying the essential hardware that powers advanced AI computations. Governments worldwide are approaching Nvidia to support their sovereign AI projects, highlighting the company's central role in enabling state-led technological autonomy. The concept of "AI factories" specialized facilities equipped with Nvidia's chips illustrates the industrialization of intelligence, reminiscent of historical manufacturing revolutions.

In response to Nvidia's dominance, major tech companies like Amazon are developing their own AI chips. Amazon's AWS Trainium processors, utilized by AI startup Anthropic, exemplify efforts to reduce reliance on external hardware suppliers. This trend reflects a broader strategy where tech giants aim to achieve vertical integration, enhancing control over performance and cost structures while navigating the competitive landscape of AI infrastructure.

While compute power and energy are tangible resources, data remains the most elusive yet critical component of AI development. The race to secure high-quality, proprietary data has intensified, leading to what some describe as "data mercantilism." Access to diverse datasets is increasingly viewed as a strategic asset with significant economic and geopolitical implications.

Forward-thinking organizations are implementing incentive structures to promote AI adoption among employees, recognizing that the integration of AI can enhance productivity and adaptability.

This sentiment is echoed by legal industry leaders. Chris Tart-Roberts, head of lawtech at the City law firm Macfarlanes, has noted: "Whilst I do not think that AI is going to replace lawyers any time soon, I do absolutely think that lawyers who use AI in the future will replace lawyers who don’t use AI." The American Bar Association has also highlighted this view, emphasizing that the adoption of AI by legal professionals is no longer optional but critical for maintaining a competitive edge.

These insights reinforce a broader trend. Companies and institutions are beginning to structure internal reward systems, upskilling programs, and performance evaluations to encourage meaningful integration of AI tools. This not only future-proofs their workforce but also aligns with the rapidly shifting demands of AI-augmented economies.

There is a novel term increasingly used these days: "neocloud." The future of AI depends not just on data or algorithms, but on where and how those data are processed.

Neoclouds are a new type of cloud service designed especially for AI. They are turbo-charged data centers built to handle the extreme demands of artificial intelligence. Unlike traditional cloud services that serve a wide range of tasks, neoclouds focus solely on one thing: powering AI systems with incredible speed and efficiency. If data is the fuel of AI, neoclouds are the engines. They are critical to understanding how nations and companies plan to dominate in AI, and why some are racing to build or control this new infrastructure.

To understand the regional dynamics of AI development, here is a comparative look at Turkey and major Gulf countries based on consistent global benchmarks:

The United Arab Emirates (UAE) ranks 5th in the 2024 Stanford AI Index, 32nd in the Global Innovation Index, and 18th in the Oxford Insights Government AI Readiness Index. Saudi Arabia places 47th in the Global Innovation Index and 29th in the AI Readiness Index. Qatar and Bahrain follow, with Qatar ranking 50th and 42nd respectively in the Innovation and Readiness indices, and Bahrain placing 67th and 56th.

Turkey ranks 31st in the Stanford AI Index, 37th in the Global Innovation Index, and 47th in the AI Readiness Index. Turkey’s project-based initiatives are yet to converge into a unified, scalable model. Without a coherent, well-funded, and internationally integrated approach, Turkey risks falling further behind in the emerging global AI hierarchy.