Your Talking Points

AI as a Strategic Asset: The multi-billion-dollar AI investments at LEAP 2025 signal Saudi Arabia’s shift from consumer to producer in the AI-driven digital economy, positioning the Kingdom as a regional leader in artificial intelligence and cloud computing.

U.S. Tech Investment in Saudi Arabia: The investments announced at LEAP 2025 mark a significant recalibration in U.S.-Saudi economic engagement, moving beyond hydrocarbons into strategic technologies such as AI, cloud computing, and data infrastructure.

GCC AI Race and Regional Implications: Saudi Arabia’s AI and data ambitions are accelerating competition within the Gulf, particularly with the UAE, which has also staked its future on AI and digital leadership.

What happened

Saudi Arabia’s LEAP 2025 conference announced $14.9 billion in technology investments, marking a significant push toward advancing the Kingdom’s AI and digital infrastructure. Among the key deals:

Alfanar Company: A $1.4 billion project to develop four data centers with a combined capacity of 88 megawatts, supporting the growth of the digital economy.

Mobily: An investment exceeding $900 million to expand data centers, submarine cables, and cross-border connectivity to support AI-driven demands.

Groq: A $1.5 billion commitment to deliver advanced AI chips, enhancing the Kingdom’s AI infrastructure.

Salesforce: A $500 million investment to bolster AI capabilities and cloud infrastructure within Saudi Arabia.

While these investments align with Riyadh’s Vision 2030, their emphasis on AI, cloud computing, data centers, and semiconductors signals a deeper strategic shift. Saudi Arabia is not merely acquiring technology—it is positioning itself as a regional powerhouse in digital infrastructure. By securing critical AI and data-processing capabilities, the Kingdom aims to control and shape the future of its digital economy, reducing reliance on external players and strengthening its geopolitical influence in the tech sector.

digging deeper

AI: A New Strategic Pillar for Saudi Arabia

Unlike previous investments in renewable energy or tourism, AI and data infrastructure hold dual-use potential—with both economic and security applications. By positioning itself as a hub for AI computing, Saudi Arabia is not just adopting technology but building sovereign AI capacity.

Why is this significant?

AI is increasingly seen as the next “strategic commodity,” akin to oil in the 20th century. By investing heavily in AI infrastructure and chips, Saudi Arabia is ensuring that it is not merely a consumer of AI models developed elsewhere but has the computational power to develop its own AI ecosystems—a capability that only a handful of nations currently possess.

The Data Center Play

Beyond AI models, control over data storage, processing, and distribution is a key strategic advantage. Saudi Arabia’s push for regional cloud dominance puts it in direct competition with the UAE, which has positioned itself as the region’s AI hub through G42 and ties with Microsoft and OpenAI. The Riyadh-Dubai rivalry in AI will intensify as both seek to host and process Middle Eastern AI applications.

U.S. Investment: A New Chapter in Saudi-U.S. Ties?

Historically, U.S.-Saudi economic ties have been anchored in energy and defense. The Groq and Salesforce deals mark a major shift in U.S. economic engagement, expanding into AI and cloud computing—industries that are geopolitically sensitive and tied to national security.

Why is this important?

The U.S. government has been restricting AI and semiconductor technology exports to China, while simultaneously encouraging tech investment in allied nations. Saudi Arabia securing major U.S. AI and cloud deals suggests a recalibration of Washington’s Middle East technology strategy.

New U.S.-Saudi Tech Alignment?

Unlike past friction over oil prices or human rights, this AI investment suggests that the U.S. sees Saudi Arabia as a viable partner in securing AI supply chains and countering Chinese influence. This comes as Microsoft expanded its cloud and AI footprint in Saudi Arabia through data centers, an AI Center of Excellence, and a Datacenter Academy, as well as Google’s partnership with the PIF to establish an AI hub in Dammam, raising the question: Is Saudi Arabia now a preferred U.S. technology ally in the Middle East?

Regional Implications: The Gulf’s AI Power Struggle

Saudi Arabia’s AI expansion places it in direct competition with Abu Dhabi’s G42, the UAE’s dominant AI and cloud computing enterprise. The UAE has aggressively pursued AI leadership, securing partnerships with Microsoft and OpenAI while developing its own AI computing infrastructure. Saudi Arabia’s counter strategy—anchored by Groq, Salesforce, and Lenovo—signals that the Gulf is emerging as a key battleground for AI dominance, with both nations racing to establish regional superiority.

A crucial distinction lies in geopolitical alignments. While Saudi Arabia is attracting U.S. AI investment, the UAE’s AI strategy has leaned toward Chinese partnerships, particularly in semiconductor and cloud technologies. This divergence could effectively create a U.S.-Saudi vs. China-UAE tech dynamic, reflecting broader global strategic tensions. This rivalry is not just about market leadership—it underscores the growing role of AI and cloud computing as strategic assets in shaping global influence, security partnerships, and economic power.

As both nations scale up their AI ecosystems, the Gulf Cooperation Council (GCC) could become a critical AI infrastructure hub for emerging markets, particularly in Africa and South Asia, where demand for cloud computing and AI services is rapidly growing.

The AI and data center investments announced at LEAP 2025 are about far more than economic diversification. They represent a push for long-term control over digital infrastructure, a crucial factor in shaping regional and global influence. By securing major U.S. partnerships, Saudi Arabia is not just advancing its AI capabilities—it is deepening its technological ties with Washington, potentially marking the start of a new U.S.-Saudi digital alliance. The implications of this shift extend beyond the tech sector, with far-reaching consequences for Middle Eastern geopolitics and the future balance of power in the region.

Talking Points: Saudi Arabia’s AI Ambitions, Strategic Alliances, and the Evolving Regional Tech Landscape