Gulf Ambitions and American Visions: AI’s Role in Middle East Alignment

Amid a growing rift between Saudi Arabia and the United Arab Emirates (UAE) stand two giants: the United States and China. As global artificial intelligence (AI) ambitions and tensions between the Gulf monarchies have risen, an ensuing tech arms race has accelerated the rush of two great powers into the region. But despite current partnerships with the United States, both Gulf countries ‘hedge,’ or seek deals from both great powers, allowing China to entrench itself in a region key to U.S. strategy.  Particularly dangerous is the onslaught of Chinese digital infrastructure, since it enables Beijing to set the standards and language in the economic revolution of these states, while also gathering intelligence on any American technologies present. The phenomenon of hedging emerges due to the isolated nature of current agreements with the United States. Washington needs to hinge its commercial diplomacy on its grand strategic diplomacy. Through a new multilateral AI bloc, the United States can decrease China’s regional role and hold Gulf monarchies accountable to a U.S.-led technological order. Such a bloc would guarantee priority access to U.S. technologies, enable states to decouple from China, and help diffuse current hostilities through incentivizing regional cooperation. As the Middle East shifts, the United States must usher in an order favorable to winning great power competition. A sound AI policy can unlock that reality.

Hedging is Structurally Rational

Differing strategic logics have emerged between Saudi Arabia and the UAE. The Saudis deem the status quo as essential to their security and seek to preserve it.  But to Abu Dhabi, the Emirates must reshape the current state of affairs in their commercial favor. The latter has adopted a creative, unconventional approach to traditional regional dynamics to mold the region favorable to their aims. [1] The Emiratis back separatist actors, in countries ranging from Iraq to Somalia, so that they might maintain influence over key regions, while simultaneously seeding trouble across the Horn of Africa and creating daylight between U.S. regional partners. [2][3] But this strategic split incentivizes hedging of Gulf States to the detriment of U.S. interests. Israel’s retaliatory destruction of Iranian proxies following October 7th and the U.S. war have hindered Iran’s ability to destabilize the Middle East and to unite the Gulf States. [4] The Mukalla incident of December 2025—where the Saudis bombed a U.A.E. weapons-shipment to separatist actors after the Emirati-backed Southern Transition Council in Yemen made major gains—provides the latest hiccup in a laundry list of instability and proxy fights. [5] Despite these fissures, the economic origins of the split show hope for the United States.

Rather than impose an ideological vision, both the Saudis and Emirates are in a race to diversify their economies beyond oil dependence to make themselves less vulnerable to changes in the global energy markets. The Saudis, through Vision 2030, attempt to make Saudi Arabia not just a regional powerhouse but a global competitor in AI. [6] Likewise, the UAE has its own vision for its economic diversification and global AI ambitions in the next decade. [8][9] Although both countries have made headway through tourism and data infrastructure, an achievement gap further fuels competition. While almost 40 percent of Saudi GDP comes from oil, the UAE has brought their number down to about 20 percent. [7] An arms-race for global engagement has ensued. 

The most rational solution to these countries’ ambitions? Hedging. As each actor tries to outpace the other, they realize the best deal lies in the middle of the two great powers. While Gulf monarchies have always engaged with China and the United States, the current rivalry and rush to diversification have accelerated this engagement. China currently offers digital infrastructure and investment, which Gulf monarchies have obtained with little consequence to their deals with the United States. The lack of political conditions and cheaper infrastructure, perhaps by 30 percent, influences Gulf states to choose Chinese options over American ones. [8][9] 

The United States suffers as a result. While obtaining the best of the United States, Gulf monarchies give up key information and sites to China. Through offering these countries immense, cheap infrastructure projects, China becomes more privy to information on the conduct of these countries,their relations with the United States, and American technologies. Through “Digital Silk Road 2.0,” a digital infrastructure initiative, Beijing has used equipment like 5G towers and AI cameras to create a Gulf ecosystem of wares with cyber espionage capabilities. [10] In 2022, the UAE gave air-to-air missile technology to Huawei through the Emirati company G42,  furthering an alarming Chinese presence and fragmentation of U.S. geo-strategic efforts in the area. A belt of states along the Persian Gulf and North Africa aligned to the American-led order keeps key trade routes protected. That’s potentially compromised in the presence of Chinese digital infrastructure. Even worse, Chinese presence subjects American military bases to espionage. The resumed construction of a Chinese facility at Khalifa port in the UAE and the hosting of Chinese forces 20 miles away from Al Dhafra airbase pose a major threat to American security. [11][12] 

Washington has welcomed Gulf investment and partnerships, it turns a blind eye to Beijing’s cash and infrastructure projects in the region. Current deals with the Saudis have proved fruitful to American investors, but Washington cannot lose sight of Saudi involvement with China. The finest American technology—advanced semiconductors, civil nuclear projects, and most coveted fighter jets—was part of a November 2025 deal in exchange for the Saudi investment in the United States. [13] The UAE has been offered similar boons, but its ties to China brought the Biden administration to delay the delivery of F-35s—the outcome wasn’t a break in ties with China, but the collapse of the deal. [14][15] But unlike the Saudis, the UAE is a major player in a U.S.-brokered regional framework, the Abraham Accords, and yet it continues to flirt with Beijing. [16] In such an important strategic space, Beijing’s presence should not go unnoticed.

The Solution: A New AI Security Bloc

Current agreements, both bilateral and multilateral, have inadvertently encouraged this hedging behavior. Standing deals have not created structural regional penalties for deviating from Washington, nor webbed together Gulf actors’ incentives. But if the United States could hinge the national prosperity of these countries on cooperation, it can possibly diminish Gulf tensions and limit hedging. Historically, economic cooperation has taken a backseat to security cooperation. Yet working together on defense matters is not the panacea it may seem: it has allowed these countries to play nice at home, but fight in proxy theaters. Economic integration through regional frameworks would stake the national prosperity of these nations on their cooperation. Likewise, newly imposed incentives and costs could solve the China issue. The United States needs to create a disciplined, multilateral framework that unites its security and economic interests. Washington must restructure regional incentives by linking the Gulf AI sector to a U.S.-led technological order that would condition access to key technologies on decoupling from Beijing. U.S. advanced semiconductors contain both the high volume and computing power needed to sustain the cutting edge of AI models required to accomplish the Gulf’s global AI ambition. [18]

Chinese models simply can not fill this gap—its chips are not nearly as advanced. [19] In a 2025 report from the Council on Foreign Relations, Chris McGuire has displayed that American company NVIDIA’s H200 chip is “far better than any chip currently available in China”. [20] Meanwhile, Huawei continues to fall behind in not just performance, but the quantity of chips. The company is projected to produce only 2 percent of NVIDIA’s computing power by 2027. [20] If the U.S. provides Gulf partners access to these technologies under current conditions, there is no guarantee that it will not fall into CCP hands. Letting China have access to these technologies would be catastrophic to America’s technological edge, not to mention the billions of dollars that would be lost from the research and development (R&D) required by the private sector to manufacture these products. 

Export of critical U.S. technologies to the Gulf states continues despite ties to Beijing. The Trump administration has rescinded the Biden-era export controls and put forth new guidance on partnerships with “trusted” foreign governments. [21] Washington needs to restrict trusted governments to those that make an active effort to decouple from Chinese infrastructure. A regional plan could use Gulf access to cutting-edge American technologies as an incentive to join. Meanwhile, Washington should review prior export deals made with these countries. Though this would upset markets, the cost of China gaining access to key technologies is too much to ignore. 

A New Bloc

To use the AI lever to achieve grand strategic objectives, the United States should roll out a joint Middle East AI security framework. The Pax Silica, a State Department vision for U.S-led technological order in the global AI supply chain, can turn the current economic revolution of the Gulf states into a network of cooperation and concord. This plan can implement such a vision by centering economic objectives on parting from Chinese technologies and encouraging regional cooperation. Membership will have a twofold effect: halting the procurement of Chinese data infrastructure and investment, while also advancing a U.S.-led AI ecosystem. Compliance with membership will also offer premium access to U.S. markets and technologies. This agreement will be contingent on multiple states working together to achieve the deal, not just a bilateral agreement between Washington and a singular Gulf monarchy. To achieve its aims, Washington needs to impose costs of deviation. When the current rivalries finally work together on technology, not just security, their connected economic prosperity will keep them committed to the United States and limit their proxy wars.

Of course, total alignment will not happen in a day. In the first phase of building a U.S.-Gulf AI bloc, Washington should demand the halt of any new deal for Gulf countries to obtain Chinese infrastructure. A regional working group should come about to ensure current compliance and review those infrastructure projects already present. In the second phase, the U.S. should begin to export cutting-edge technologies to compliant states. Meanwhile, states should cooperate in a regional forum to create a regional divestment timeline from China. Though a big ask, this is not fantasy—it has already happened once. In 2024, the United States pressured G42, chaired by an Emirati official, to divest from ByteDance. [22] If the countries fail to deliver on these plans, then technology and defense exports should be halted. Costs must be high to ensure compliance. In the final stages, the United States can roll out our priority access to advanced semiconductors. These Gulf states should have priority access to new technologies as well. And as these partnerships progress, the United States should encourage collaboration between American and Gulf countries for AI (R&D). Future prosperity ought to emerge from current adherence. Should members diverge from the deal, snapback frameworks should suspend these deals. 

To achieve this, regional reporting mechanisms and inspectors should be in place. Creating regional review boards, consisting of representatives from Gulf countries and the United States, will increase the contact these nations have with one another in their national economic planning. The acceptance of new Chinese digital infrastructure should be considered a violation of compliance.  Should a failure to comply be found, snapback mechanisms, such as imposing sanctions or revoking trade deals, can deter the present situation from remerging. Although it may seem draconian, spelling out clear red lines and punishments for failure from the beginning will create clarity and stop the current situation from taking shape again. Such is necessary to limit gray-zone wandering into Chinese markets. 

Under this plan, the United States would not just avert risk, but actively benefit. Through connection, the United States will collaborate more with Gulf countries on developing data centers, key to bringing about the prosperity of the U.S. technology sector in the years to come. Gulf states contain the energy and regulatory environments that data centers need to function [23] Moreover, these countries will be able to buy key American technologies, which will bring capital back to the American companies’ R&D. Economic integration would obtain lasting, structural commitment for investors, create a secure market, and the ensuing incentive structure will make it long-term.

It is one thing to propose a plan, but another for Gulf countries to adopt it. Yet the United States has key, irreplaceable leverage: American technology is necessary to the national trajectory proposed by Gulf monarchs. Nationalism, strong militaries, and booming economies are necessary for these leaders to solidify their regime and put space between themselves and their former pan-Islamic elements. [24][25] As these states modernize, they need to turn their identity towards something that their citizens can rally around, otherwise they may face severe social unrest—a lesson the Saudis learned all too well during the Grand Mosque Seizure in 1979. To fulfill this new vision of social contract, American semiconductors and companies are required to cement this new economic trajectory and national fervor. Furthermore, current rivalries are not as daunting as ideological splits of the past. National prosperity, not a certain form of sectarianism, is at the core of the UAE-Saudi split. There is no cry rallying Saudi Arabia to arms against the UAE. 

American companies will likely push back. The market saw an immense increase when recent deals with Saudi Arabia in 2025 were solidified. This is beneficial to the markets in the long term. A secure environment, where Chinese infrastructure is not on every corner, will solidify the credibility needed for these companies to make long-term deals. Furthermore, there will be more space for American companies when China is less of a competitor. Chinese retaliation may ensue, but the United States will offer the key resources to wean the countries from Chinese digital infrastructure and trade deals. The largest piece of leverage that China has is its consumption of Gulf oil. However, China is reliant on Gulf oil— they will not cede their oil in the Gulf, since that ranks higher on their national interest in the region. [26]

Conclusion

Sharing our most prized technologies cannot be taken lightly. The current threat of China in such a vital point at the forefront of technological development is too great to ignore. For the security of the U.S.-led order and great power competition, the United States needs to make a concerted effort to usher in a Middle Eastern bloc of technological alignment. Through connection and cooperation, we can bring about a new era of cooperation. Otherwise, Gulf rivalry will persist and invite China to entrench in the region and spy on key U.S. technologies and bases. The carrots to eliminate hedging exist. It is time that Washington used them.

Ashley Heyward Brooks Dowdney ‘26 served as the Chapter Founder and President at the University of North Carolina, Chapel Hill, where she majored in Peace, War, and Defense and Classics. 

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Notes:

[1] H. A. Hellyer, “Risk, Order and Power: the Saudi Emirati Divergence,” War on the Rocks, January 30, 2026, https://warontherocks.com/2026/01/risk-order-and-power-the-saudi-emirati-divergence/

[2] Ahram , Ariel, & Alaadin, Ranj, “Separatists and Spoilers: The UAE’s Way of Proxy Warfare, ” Foreign Policy Research Institute, July 11, 2022, https://www.fpri.org/article/2022/07/separatists-and-spoilers-the-uaes-way-of-proxy-warfare/. 

[3] Bernard Kaykel, “The Implications of Iran’s Failed Proxy Strategy,” Hoover Institution, December 10, 2024, https://www.hoover.org/research/implications-irans-failed-proxy-strategy.

[4] Giorgio Caferio, “The Enduring Saudi-Iranian Détente,” Arab Gulf States Institute, July 29, 2025, https://agsi.org/analysis/the-enduring-saudi-iranian-detente/

[5] Jon Gambrell, “Saudi Arabia bombs Yemen port city over weapons shipment from UAE for separatists,” Associated Press, December 30, 2025, https://apnews.com/article/saudi-arabia-bomb-yemen-mukalla-weapons-uae-9fc56e4678a12f56d61b1ecf855d4a4e

[6] Hellyer, “Risk, Order and Power: the Saudi Emirati Divergence,” https://warontherocks.com/2026/01/risk-order-and-power-the-saudi-emirati-divergence/

[7] Hussain Abdul-Hussain, “The End of the Middle East’s Oil Bonanza,” The Foundation for the Defense of Democracies, February 3, 2026, https://www.fdd.org/analysis/2026/02/03/the-end-of-the-middle-easts-oil-bonanza/

[8] Calabrese, John, “China’s Model of Power Projection in the Middle East,” Middle East Institute, March 30, 2026, https://mei.edu/publication/chinas-model-of-power-projection-in-the-middle-east/. 

[9] El Kadi, Tin Hanane, “Local Agency Is Shaping China’s Digital Footprint in the Gulf,” Carnegie Endowment for International Peace, January 6, 2025, https://carnegieendowment.org/posts/2025/01/local-agency-is-shaping-chinas-digital-footprint-in-the-gulf

[10] Tye Graham and Peter Singer, “How China’s giants wired the Gulf,” Defense One, May 13, 2025, https://www.defenseone.com/threats/2025/05/china-tech-giants-wired-gulf/405283/

[11] John Hudson, Ellen Nakashima, et al. “Buildup resume at suspected Chinese military site in UAE, leak says,”The Washington Post, April, 26, 2023, https://www.washingtonpost.com/national-security/2023/04/26/chinese-military-base-uae/

[12] Sean Matthews, “US Intelligence assessed Chinese Military was hosted at UAE base” Middle East Eye, November 24, 2025, https://www.middleeasteye.net/news/us-intelligence-assessed-chinese-military-was-hosted-base-uae

[13] “Fact Sheet: President Donald J. Trump Solidifies Economic and Defense Partnership with the Kingdom of Saudi Arabia,” The White House, November 18, 2025, https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-solidifies-economic-and-defense-partnership-with-the-kingdom-of-saudi-arabia/

[14] Jacob Magid & Agencies, “US suspends $23 billion sale of F-35s to UAE that followed Abraham Accords” The Times of Israel, January 27, 2021, https://www.timesofisrael.com/us-puts-hold-on-sale-of-f-35s-to-uae-that-followed-abraham-accords/

[15] “UAE does not plan to re-open F-35 fighter jet talks with US,” Reuters, September 14, 2024, https://www.reuters.com/business/aerospace-defense/uae-does-not-plan-re-open-f-35-fighter-jet-talks-with-us-uae-official-2024-09-14/. 

[16] “The Abraham Accords,” U.S. Department of State, https://www.state.gov/the-abraham-accords

[17] “Pax Silica,” The U.S. Department of State, https://www.state.gov/pax-silica

[18] Chris McGuire, “China’s AI Chip Deficit: why Huawei Can’t Catch Nvidia and U.S> Export Controls Should Remain” The Council on Foreign Relations, https://www.cfr.org/articles/chinas-ai-chip-deficit-why-huawei-cant-catch-nvidia-and-us-export-controls-should-remain

[19] Chris Miller, “Why China Can’t export AI Chips,” The American Enterprise Institute, https://www.aei.org/foreign-and-defense-policy/why-china-cant-export-ai-chips

[20] Chris McGuire, “China’s AI Chip Deficit: why Huawei Can’t Catch Nvidia and U.S> Export Controls Should Remain” The Council on Foreign Relations, https://www.cfr.org/articles/chinas-ai-chip-deficit-why-huawei-cant-catch-nvidia-and-us-export-controls-should-remain

[21] “Department of Commerce Announces Rescissions of Biden-Era Artificial Intelligence Diffusion Rule, Strengthens Chip-related Export Controls,” Bureau of Industry & Security Office of Congressional and PublicAffairs, May 13, 2025, https://www.bis.gov/press-release/department-commerce-announces-rescission-biden-era-artificial-intelligence-diffusion-rule-strengthens

[22] Chloe Cornish & Kaye Wiggins, “Abu Dhabi AI group G42 sells its China stakes to appease US,” Financial Times, February 9, 2024, https://www.ft.com/content/82473ec4-fa7a-43f2-897c-ceb9b10ffd7a

[23] Yawen Chen “Data centre boom reveals AI hype’s physical limits,” Reuters, July 4, 2024, https://www.reuters.com/breakingviews/data-centre-boom-reveals-ai-hypes-physical-limits-2024-07-04/

[24] Eleonora Ardemagni, “Gulf Monarchies’ Militarized Nationalism,” The Carnegie Endowment for International Peace, February 28, 2019, https://carnegieendowment.org/sada/2019/02/gulf-monarchies-militarized-nationalism

[25] Jon Joffman “The Arab Gulf’s New Nationalism,” The Cato Institute, August 7, 2023, https://www.cato.org/commentary/arab-gulfs-new-nationalism

[26] Andrew Leber, “Imports and Influence: China’s Growing Economic Presence in the Gulf,” The Carnegie Endowment for International Peace, October 30, 2025, https://carnegieendowment.org/russia-eurasia/research/2025/10/imports-and-influence-chinas-g