American AI leadership can open a new chapter for Middle East integration
In an industrial zone on the outskirts of Abu Dhabi, Emirati state-backed artificial intelligence (AI) company G42 has poured 100,000 cubic meters of concrete to build a cluster of data centers the size of Berkeley, California. The campus will use NVIDIA chips and Oracle cloud services. It will deploy a region-specific version of ChatGPT across the government and vital sectors. It is the largest AI infrastructure project outside the United States, and it’s built on US technology.
Five hundred miles to the west, in Riyadh, the Saudi company Humain has broken ground on its own vast national AI project. US infrastructure largely underpins this project, too. NVIDIA and Qualcomm provide the chips, Amazon the cloud, and Cisco the networking.
And in the Negev desert, the United States is leasing four thousand acres to build Fort Foundry One, a joint Israeli-US tech and industrial park for advanced computing, semiconductor production, and AI development.
The United States, through government and industry, is building an AI infrastructure alliance in the Middle East, and it may write the next chapter of regional integration.
These projects represent a realization that AI, the technology powering the fourth industrial revolution, will define the twenty-first century. A World Economic Forum study estimates that AI will contribute 14 percent of global gross domestic product (GDP) by 2030. Countries will need access to cloud and compute like they need water and power plants. And they are turning to US companies to provide it.
A creative blend of diplomacy and economic policy has facilitated these developments. Last year, the State Department unveiled Pax Silica, a new coalition of countries working together to secure access to AI inputs, from critical minerals to semiconductors. The Commerce Department, for its part, announced a program to promote AI exports and approved the sale of advanced chips to the United Arab Emirates (UAE) and Saudi Arabia.
In combination, these initiatives aim to pool the contributions of trusted nations, yielding a secure supply chain that produces data centers running on US chips and applications built on the United States’ foundational models. In this vision, US systems will form the bedrock of the world’s AI, much as the world ran on Microsoft software when computers reached mass adoption. The new alliance also mitigates reliance on China, which produces nearly 80 percent of the world’s silicon, the building block for AI chips.
For the partner countries, Pax Silica and its related initiatives offer an invitation into the United States’ AI tent. The participating countries are betting that the United States will build the best infrastructure, and they are counting on Washington to keep providing partners with largely open access to chips rather than reverting to stricter export rules with more conditions and caps.
This carries profound implications for the Middle East. Among Pax Silica’s twelve signatories are three of the Middle East’s four AI leaders: Israel, the UAE, and Qatar. The fourth, Saudi Arabia, hasn’t joined yet, but it already relies heavily on US chips and cloud.
All four countries are racing to embed AI into their national infrastructure to secure their economic futures. Each brings different strengths to AI development. And they’re all looking to the United States for the anchor technology. This dynamic opens a new track for regional integration.
In the near term, the United States should establish the Middle East as a hub for American-led AI. This would deepen Washington’s bilateral relationships in the region as partner countries use US models and chips to build applications for their critical sectors.
Israel is set to grow from startup nation to indispensable tech infrastructure ally. The US-led supply chain will benefit from Israeli chip design, cloud security, and AI applications. Next year, NVIDIA will start building a campus in Kiryat Tiv’on for chip research, further establishing Israel as its largest research-and-development base outside the United States.
Meanwhile, the UAE is using its capital, land, and energy to build some of the biggest compute hubs in the world, anchoring a push to apply AI across the country. Saudi Arabia is also building sovereign infrastructure to apply AI across sectors, transforming an economy that today relies on oil and gas for 40 percent of its GDP. The Iran war’s disruption to the flow of physical goods through the Strait of Hormuz validates the Gulf countries’ plans to make advanced technology a centerpiece of their economic diversification.
Under these initiatives, a new type of bloc will likely emerge in the region—one that aligns with the United States for core economic interests, not just national security interests. Each member of the bloc will see the incentive to preserve the new US-led tech order.
This lays a foundation for cooperation between the members. The UAE-Israel relationship offers a natural place to start. After the signing of the Abraham Accords in 2020, Israel-UAE bilateral trade more than doubled in 2022 and has continued to grow in years since. The relationship will expand to include AI infrastructure collaboration. For example, Emirati hospitals could feed patient scans into an Israeli oncology model, building a new system for cancer detection.
In the long term, American tech leadership holds the promise of slowly deepening the Saudi-Israeli relationship beyond security coordination to encompass economic cooperation. For now, full Saudi-Israeli diplomatic normalization will have to wait. Crown Prince Mohammed bin Salman already reached a defense agreement with the United States and acquired access to the most advanced US chips without making concessions on normalization. And Saudi domestic politics remain too difficult for normalization without movement on the Palestinian issue. AI’s promise will not override these persistent geopolitical realities.
But opportunities for limited cooperation will emerge, and the United States should serve as the bridge, advancing the principles of the Abraham Accords even before their formal expansion. Israel and Saudi Arabia can cooperate indirectly on AI infrastructure in the absence of diplomatic relations by working through American companies. Every step toward interconnected economic infrastructure builds the incentive to protect that infrastructure, driving momentum for further cooperation in a way that diplomatic and security ties alone cannot.
When Egyptian President Anwar Sadat addressed Israel’s Knesset in 1977, taking the first step towards the first Arab-Israeli peace treaty, he focused squarely on peace and security. He didn’t invoke economic cooperation. In the 1994 Israel-Jordan peace treaty, the countries did agree to economic cooperation in the form of trade and water sharing, but the deal centered on security.
The leaders behind those deals pursued peace at the diplomatic level. Any economic cooperation would have been a bonus. They likely didn’t imagine a day when a new technology would define power and prosperity in the Middle East and encourage deep economic integration among former adversaries.
Judd Olanoff is a founding partner of the venture capital firm K. Ventures and co-founder of the Lion Forum.
Further reading
Wed, Apr 1, 2026
Jordan’s regional connectivity begins in Riyadh
MENASource By
Jordan must take the lead in making economic interconnectivity a reality with its closest regional partners.
Wed, Feb 25, 2026
To harness Saudi Arabia’s demographic dividend, Riyadh must invest in human capital
MENASource By Khalid Azim
The success of Saudi Arabia’s economic development will be determined not be the volume of capital it mobilizes, but how effectively that capital is translated into human capability.
Wed, Aug 27, 2025
The India-Middle East-Europe Economic Corridor: Connectivity in an era of geopolitical uncertainty
Report By
Weeks before the war in Gaza broke out, India, Europe, the US, and Gulf nations announced plans for an economic corridor linking the EU and India through the Gulf via rail, fiber optic cable, and pipelines. We ran the cost-benefit numbers and they’re clear: Washington should put the IMEC back on the global agenda this year.
Image: Cables run into the back of a server unit inside the data center of Equinix in Pantin, outside Paris, France, on December 7, 2016. Photo via REUTERS/Benoit Tessier.