Middle East sovereign wealth funds are evolving from passive investors to strategic architects of the AI economy. Deloitte's Sara Martins Gomes explains the flow of capital from the Gulf into the global tech space.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Sovereign wealth funds from Gulf countries are increasingly investing in artificial intelligence, with recent examples including QIA's investment in Anthropic and GX's acquisition of a stake in Intel. These moves are part of a broader strategy to diversify regional economies and establish the Gulf as a key player in the global technology landscape. 

According to Deloitte, these investments are not solely about financial returns but also about gaining influence and access to cutting-edge technology. The region's energy resources and investment capacity provide a win-win scenario for both Gulf investors and global technology firms. The Gulf is also positioned to engage with both Western and Eastern technology markets, aiming to become a global hub for AI innovation and services.

Deloitte: Gulf AI investments are new form of diplomacy

just the last couple of weeks we've heard about QIA investing in Anthropic and GX said that it joins Silver Lake Management in the 51 percent acquisition of Intel. So you're really really seeing these strategic stakes go through especially out of some of the Middle East sovereign wealth funds. Why are Middle East sovereign wealth funds looking at these types of investments. So to understand this I think we need to take a step back and understand that in this region in the Gulf countries. So AI is a key pillar of economic diversification and growth. So this is the first thing. So putting AI at the core of the diversification. So it means that we need to play in a kind of barbell approach. So across the value chain it is not just about code. It is about the infrastructure and the infrastructure requires investment. And we are not talking about millions of investment. We are talking about two billions and trillions of investment. And this is a stable one a long term. So everything that wealth fund wants and these wealth funds investing in all parts of the AI stack. So yes. So in one and they are investing at the core. So like they have done in the past to build the oil structure so to build the infrastructure but also in the part of innovation and this part of innovation. This is what is putting the Gulf in as a global player because they are doing some partnerships with private equity companies with tech companies that are putting them in a global position to discuss in the table with other countries. It was interesting when President Trump did his trip around the region that many of the GCC nations pledged to invest. Let's say around a trillion dollars each in the United States. Plus our mind is a couple of hundred billion. Who's counting at this point. But these investments into strategic tech sectors how much of this is because these sovereign wealth funds see an investment opportunity versus say politically it being expedient. So this is both. This is not just about money. This is about influence. So we know. And now the sentence about A.I. is the new oil. Yes he is the new world because this is what will give you the influence in the future. So in one end you are seeing the returns on investment that you have through the investment that you are done in or that you are doing in the platform in the infrastructure but also the influence that it will provide you in the future. This is the only way to get for example IP from from global companies to get access to the pipeline and to get access to what are the developments for the future. So this is the only way. But is the expectation that the flows are only going one way or are the GCC countries getting something back in return. And specifically there you know there was a lot of talk about what types of chips Saudi Arabia and the UAE would get access to and whether they would get access to some of those high ends and video chips. Do you see this as more of a two way relationship. This is a win win. So this region needs the global exposure but the global companies also will benefit from what this region could bring to the table. We are talking about the investment that the wealth funds can put in the table like I was discussing but also to build this compute power. It requires a lot of energy. So and the energy in this region is cheap and also the access of renewals. So it is a win win. This is not only a one direction benefit to it. What about the Middle East. Middle East money also looking east and creating partnerships with the east. We talk about the emergence of advanced tech and A.I. out of China just over the last month. There's been a lot of optimism and breakthroughs in that space. How do you see the interplay between Middle East money's relationship with the West and potential opportunities in the east as well. So I think we are in a unique position here exactly because we can negotiate or discuss with both sides of the world. Of course in terms of the governance that it will requires the political political issues or the political challenges that it will requires. It is another thing. But we are in a unique position to get the best for both worlds. Ultimately what do you think is the GCC's ambition. What does it look like. What are they trying to achieve. A.I. ambition of this region is to be a global player like U.S. or China. And I have no doubt about it. And I think this region is positioned to achieve the goal they have. But is it in terms of application because you know you don't have chip making facilities here. You don't have chip design going on here. So is it in the shovels or is it you know the picks and shovels around this a gold rush or is it in the actual application of artificial intelligence. This is not a short term game. This is a long term. So this region are building the infrastructure but also looking to the monetization part. So this is we are now investing on this bottom layer. But what are the services that we will be able to provide on top of these. What are the A.I. marketplaces. We are seeing that in the future this region will become a hub a global way up. So it is also the monetization part.

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Deloitte: Gulf AI investments are new form of diplomacy

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Rise of AI