EquitiesFirst Could Help Gulf States Build Tomorrow’s Digital Infrastructure Today

Artificial intelligence infrastructure is reshaping global economics, and nowhere is this transformation more visible than across the Arabian Peninsula. Gulf states are deploying sovereign wealth and energy advantages to construct computational capabilities that could rival Silicon Valley. For alternative financing providers like EquitiesFirst, this technological revolution creates opportunities to offer supportive capital as traditional banking systems could struggle to serve the entrepreneurs and technology companies driving the change.

What distinguishes the Gulf approach isn’t simply scale, but the coordinated nature of these investments. Unlike the venture capital-driven model of Silicon Valley or the state-directed approach in China, Gulf states are combining government backing with market mechanisms, creating hybrid models that could play a central role in defining the next phase of AI development globally.

Semiconductor Diplomacy and Computational Power

Advanced semiconductors have become instruments of geopolitical influence. One recent case in point: the U.S. has reached a preliminary agreement with the United Arab Emirates allowing annual imports of 500,000 of Nvidia’s most sophisticated AI chips beginning in 2025. This arrangement multiplies available computing power exponentially compared to previous export restrictions.

Saudi Arabia has secured even larger commitments. HUMAIN, the AI arm of its Public Investment Fund, is making a major investment to build AI factories with a projected capacity of up to 500 megawatts powered by several hundred thousand of Nvidia’s GPUs over the next five years. To put this in perspective, 500 megawatts could power a city of 400,000 people. In this case all that power will fuel artificial intelligence operations. Strategic technology financing has become increasingly important as these massive infrastructure projects require flexible capital solutions.

These arrangements indicate broader shifts in technological competition. While Chinese AI development has shown impressive progress, with recent breakthroughs challenging assumptions about computational requirements and algorithmic efficiency, Gulf states are establishing themselves as a distinct third pole in global AI competition. Their advantages lie not in matching Silicon Valley’s innovation culture or China’s manufacturing scale, but in combining abundant energy with patient capital.

Geography as Competitive Advantage

The physical location of AI infrastructure matters. A new UAE-US AI campus will include 5GW of capacity for AI data centers in Abu Dhabi, providing a regional platform from which U.S. hyperscalers will be able to offer latency-friendly services to nearly half of the global population living within 3,200 km (2,000 miles) of the UAE. This positioning could help capture new AI users across Africa, South Asia, and Southeast Asia.

Energy economics amplify these geographic advantages. AI data centers require massive electrical consumption, with large facilities consuming 50-100 megawatts continuously. Current projections suggest data centers could account for 10% of American electricity consumption by 2030, doubling from 4% in 2023. Gulf states possess abundant energy resources without the grid constraints that limit expansion in developed economies. Investment advisory services have recognized the potential in these regional infrastructure developments.

These infrastructure developments stand to generate substantial investments from entrepreneurs and data center operators. But flexible financing solutions are often required to capitalize on growth opportunities without diluting equity positions. Securities-backed lending could meet this need, providing immediate capital financed against long-term equity positions.

Capital Formation in Technology Sectors

Saudi Arabia recorded private-sector investment growth of 57% over two years, with total private investment reaching SAR959 billion riyals ($254 billion) in 2023. Much of this growth concentrates in technology and advanced manufacturing sectors directly related to AI development.

Early participants in AI infrastructure development, data center operations, and technology services often experience rapid equity appreciation. However, these entrepreneurs frequently need additional capital to pursue expansion opportunities, acquire competitors, or develop new product lines without liquidating their successful investments. Global capital solutions have become essential for technology companies looking to scale rapidly in the AI sector.

Traditional banking approaches may prove inadequate for these financing needs. Technology companies often possess valuable intellectual property, software platforms, and client relationships that don’t align with traditional lending criteria.

This financing model addresses these gaps directly. Technology entrepreneurs can access capital using their stock holdings while maintaining long-term equity positions.

From Local Innovation to Regional Dominance

The AI ecosystem across the Gulf has already moved beyond experimentation into commercial deployment. Companies throughout the region are implementing machine learning solutions at enterprise scale. Bayzat, a Dubai-based payroll platform, has deployed automation across HR and insurance operations, while transportation company Careem uses advanced algorithms to optimize ride-hailing services throughout the Middle East and North Africa.

Dubai and Abu Dhabi together host more than 1,200 AI firms. Enterprise confidence in AI technology is similarly high, with 94% of UAE enterprises believing AI will drive long-term growth, and nearly half expecting return on investment within two years.

What makes this ecosystem particularly powerful is its regional expansion potential. Gulf-based AI companies can both serve local markets and become regional champions with international reach. MGX, an Abu Dhabi-based investment firm, plans to funnel US$100 billion into AI and semiconductor deals. Saudi Arabia’s HUMAIN has announced a $10 billion venture fund targeting start-ups across the US, Europe, and parts of Asia. Emirati AI firm G42 is rapidly building out data centers across Africa, positioning UAE and Saudi Arabia-based businesses to enter new markets as essential service and infrastructure partners.

Companies scaling across multiple markets often require significant working capital while maintaining their equity positions for future growth. Alternative capital providers accommodate the complex financing needs of rapidly expanding technology companies operating across diverse regulatory environments.

On the other hand, traditional financial institutions across the Gulf region face significant limitations when serving technology companies. Small and medium enterprises in the region face a $250 billion financing shortfall. Regional banks concentrate their lending portfolios heavily on government entities and established corporations, with technology startups and growing firms receiving disproportionately limited attention.

Future Implications

AI infrastructure development, economic diversification, and wealth creation are converging across the Gulf region. As these economies reduce hydrocarbon dependence while building advanced technology capabilities, demand for sophisticated financing solutions stands to continue expanding.

According to World Bank data, the UAE achieved 3.3% economic growth in 2024, with non-oil sectors expanding 4.1% and demonstrating strength across tourism, real estate, construction, transportation, and manufacturing. Qatar’s economy is projected to reach 4.1% growth in 2025-2026, supported by similar diversification efforts. Technology and AI-related activities drive much of this expansion.

For comparable alternative financing firms, the combination of expanding technology sectors, substantial private wealth creation, and constrained conventional financing options provide ideal conditions for equities-backed financing.