Hello, welcome to TechScape. Today in Tech, we’re discussing Persian Gulf countries that are asserting sovereignty over their artificial intelligence in response to the destabilizing United States. That, and US tech giants plan to spend more than $600 billion this year alone.
Could the Persian Gulf states capture some of America’s technological dominance?
I spent most of last week in Doha at Web Summit Qatar, the Persian Gulf’s new edition of the popular annual tech conference. One theme was prominent throughout the speeches and conversations I saw: sovereignty.
The conference founder set the tone of the summit on the opening night: “Three years ago (when Web Summit Qatar started), people were talking about entering a multi-polar world. We are now living in a multi-polar world,” said Paddy Cosgrave.
As evidence, he referenced the sharp rebuke of Donald Trump delivered by Canadian Prime Minister Mark Carney in Davos a few weeks ago. He pointed to the work that had preceded him on stage: a dancing robot built by a Chinese company, which he called the most advanced in the world. Cosgrave also brought together two speakers who would practice the dynamics he described. First up was the Prime Minister of Qatar, who announced a series of billion-dollar steps to boost startups in the country. Then came the Palestinian-Jordanian founder of Upscrolled, a rebel TikTok competitor, whose founder announced on stage that the app had surpassed 2.5 million users amid a confused reaction to TikTok’s new US unit.
As the US becomes a more volatile place to immigrate to and start a company, all three major Gulf powers are touting their billions of dollars of investment in AI. It is not that only Qatar is spending big. Last year, the UAE signed a deal with the US for advanced chips that will fill one of the world’s largest datacenters to be built outside Abu Dhabi. Saudi Arabia’s state-owned AI firm, Human, has struck billion-dollar deals to build a “full-stack AI ecosystem,” meaning the kingdom wants its own datacenters, training data, cloud services and AI models, maybe even its own chips. purpose of sovereign ai – Artificial intelligence in control of your country from tip to tail – is obvious.
However, steps toward greater AI capabilities in the Gulf will not end cooperation with the US. While I was there, a newspaper owned by members of Qatar’s ruling al-Thani family trumpeted a deal between Jared Kushner’s AI company, Brain Company, and Qatar’s Ministry of Municipalities to automate construction permitting. first line in the story Gives an idea of the message: “Qatar is gaining prominence as a major player in practical artificial intelligence employment, leveraging partnerships that combine Silicon Valley expertise with local knowledge.”
Will the Gulf countries’ efforts for their own AI be successful? This was the second question on everyone’s lips. (Of course, the first was: “Is AI a bubble?”) Several major factors exist against the region’s development of sovereign AI. Regional access to semiconductor chips is limited, although increasing in any way. The region doesn’t have enough domestic engineering talent to power an AI industry, but Doha offers India’s engineers a far more attractive time zone than San Francisco to connect with family, plus it costs less than Trump’s $100,000 per visa. For building AI models, there is much less Arabic text material online compared to English.
Tech’s financiers, venture capitalists, are debating where to invest money amid the turmoil. Participants in one of the panels I moderated had competing viewpoints. A French venture capitalist argued for supporting startups across Europe and the Middle East. He and a German VC on another panel said it has become more difficult to invest in the U.S. in recent years because of steep valuations, which require lower percentage ownership for investors. A partner at a venture capital fund that invests only in San Francisco companies argued that Silicon Valley companies have a real potential to deter challengers and are therefore still the best bet.
The Gulf country is not alone in trying its best to create its own tech ecosystem. Europe is grappling with similar anger over sovereignty, fueled by Trump’s hostility toward the region. But the block has significant challenges to address. The EU’s relatively strict tech regulation has led to world-leading privacy protections for its citizens, but the continent’s tech sector is relatively weak compared to the laissez-faire US. Will the EU Parliament sacrifice the privacy guaranteed by the proposed AI Act in favor of the deregulation companies need?
Europe’s governments are investing much less than cash-rich petrostates in the Gulf. Can EU companies and governments replicate all the equipment they need without significant infusions of money? France recently Thrown away Zoom, Microsoft Teams, and Google Meet favor an application called Visio, which, coincidentally, is already the name of a Microsoft diagramming software. Belgium and the Netherlands are still essential to the global semiconductor supply chain, although only a part of it. Elon Musk’s Starlink is making a big impact on the continent as it attempts to promote a domestic alternative to Eutelsat, which has a long way to go to catch up to its US counterpart.
One notable exception to Europe’s laggards at the Web Summit: London startup ElevenLabs, seen as a developer at the forefront of generating voice and music with AI. The company’s Polish founder announced earlier in the day that his company had closed a $500 million fundraising round led by blue-chip US firms including mega-colleague Andreessen Horowitz, tripling ElevenLabs’ valuation.
Crypto has suffered a major setback
$600bn+ a year: Tech giants’ staggering spending on AI continues to rise
During quarterly earnings calls last two weeks, Alphabet/Google, Amazon, Microsoft and Meta informed Wall Street that they will collectively spend more than $600 billion in the coming year, mostly on the infrastructure that underpins AI. This amount of money is less than what many governments around the world spend to run entire countries. Each company’s capital spending – money spent on fixed, physical assets (in this case land, buildings and chips for datacenters) – is equal to or greater than the combined capital spending of the last two years. Last year the four totaled $359 billion, and the total for 2024 is $217 billion. bloomberg.
Alphabet told Wall Street it would spend between $175bn and $185bn over the same time period, almost double from last year. Meta reported between $115 billion and $125 billion. According to Bloomberg report, Microsoft is going to spend about $ 105 billion.
Amazon is one of the four to tell investors that its capital spending will rise the most, from $125 billion last year to $200 billion in 2026. The day before Amazon’s earnings, Jeff Bezos’s Washington Post laid off a third of its staff. The two are not directly related corporations, but there are profound differences. Bezos bought the Post in 2013 for $250m, 0.125% of what Amazon is spending this year alone.
Even Tesla, an AI company in a more indirect sense than others, revised down its capital spending to $20 billion given the company’s declining revenues, which is far higher than analysts expected – or apparently desired.
The scale of the figures is astronomical, but there is reason to believe they will be even bigger. Take a look at the number of commercials for AI products in the Super Bowl that performed their best convince the americans That they really like AI. The market for these products has neither been established nor developed into a sector where there are no incumbents. AI is still a ground grab, and tech giants want to grab as much ground as possible.
