The oil‑rich Gulf states are investing tens of billions to become AI powers, yet money alone cannot break Nvidia’s market dominance.
The scale of Nvidia’s hold
Saudi Arabia agreed on June 1 to use self‑driving taxis that run on Nvidia technology. The deal was struck by Humain, the venture created by the kingdom’s Public Investment Fund to build an AI hub. Humain is also constructing data centers in Riyadh and Dammam, powered by several hundred thousand Nvidia chips.
The United Arab Emirates is matching that scale through its state‑backed AI firm G42, which is erecting a data center in Abu Dhabi called Stargate. Its first phase will run on 400,000 Nvidia chips. G42 has spread orders among multiple suppliers, yet the machines inside Stargate would be “mostly” Nvidia, CEO Peng Xiao said in January.
Nvidia’s data‑center business recorded a $51.2 billion revenue in the quarter ending October, up 66% from the prior year. Its newest Blackwell architecture line is described as “sold out” in the earnings release.
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Part of the grip comes from the chip itself; the other part stems from the Compute Unified Device Architecture, Nvidia’s proprietary parallel‑computing platform. More than four million developers now work within the CUDA system, meaning a switch to a rival would require rebuilding years of software infrastructure.
The limits of shopping around
For the Gulf, the strategy focuses on buying the fastest path into the global AI economy, even if that means accepting terms set by a U.S. company and its government. The cash is real, but it does not rewrite market rules shaped by a single dominant player and political constraints.
Humain broadened its supplier list last August with a $10 billion deal with AMD for 500 megawatts of computing power, a $2 billion agreement with Groq to run its chatbot, and a tie‑up with Qualcomm to fill a Saudi data center with 200 megawatts of its chips. These agreements provide Gulf chips that handle narrower tasks than Nvidia’s, while training powerful models still demands Nvidia hardware, Kamil Dimmich, a partner at North of South Capital, told Rest of World.
The first Nvidia order from Humain was 18,000 of the newest Blackwell chips, hardware that no rival can yet match.
“Diversification away from Nvidia reduces the Gulf’s dependence on any one commercial vendor, but it doesn’t change the political risk of dependence on the U.S. at all,” Sam Winter‑Levy, a fellow at the Carnegie Endowment for International Peace, explained. “What would change that is Chinese supply, but China cannot yet export competitive chips at scale, and the U.S. has made Gulf access to U.S. AI tech conditional on keeping Chinese hardware out.”
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The reality of AI sovereignty
Chips from AMD or Qualcomm carry the same strings as those from Nvidia, because all are U.S. products requiring Washington’s approval before sale to the Gulf, Winter‑Levy noted. China’s best chips lag Nvidia by at least a generation, and its own firms purchase most of what they produce.
Even the Gulf’s wealth buys less of an edge than expected, because deep‑pocketed U.S. tech giants can raise comparable capital. “Infinite money is not a decisive advantage now,” he observed. “U.S. buyers can access vast capital markets at high valuations, so that is not a constraint, though it may become one later.”
Building an AI industry free from any single supplier has become so costly that even the world’s richest economies struggle, according to Mohammed Soliman, a senior fellow at the Middle East Institute. “True technological sovereignty in artificial intelligence is extraordinarily expensive and, for nearly every country outside the United States and China, effectively unattainable,” he said. “Even Europe, despite its industrial capacity and capital markets, lacks the realistic prospect of building a fully independent AI stack within any meaningful time frame.”
Still, Gulf money, stakes in U.S. technology firms, and rapid data‑center construction give it real bargaining power, Winter‑Levy concluded. Its leaders know exactly what they are choosing. “The Gulf’s current path accelerates integration through massive data centers and direct U.S. partnerships rather than chasing expensive and uncertain independence,” Soliman added. The region remains a pragmatic AI actor.