Silicon Valley’s Bad Bet on the Gulf

Foreign Affairs  |  Aaron Bartnick

President Donald Trump’s May 2025 bilateral agreements secured $2.2 trillion in deals with Qatar, Saudi Arabia, and the United Arab Emirates to build American artificial intelligence infrastructure in the Persian Gulf. This massive technology transfer aimed to leverage abundant cheap energy and sovereign wealth capital while bypassing domestic regulatory hurdles.

However, exporting advanced semiconductor chips and hosting critical data centers in a highly volatile region exposes vital technological assets to severe geopolitical vulnerabilities. The initiative reflects a strategic trade-off where the United States prioritises rapid commercial scaling and capital access over long-term technology security. Ultimately, these deployments risk exposing sensitive dual-use capabilities to foreign espionage and regional instability, potentially undermining Washington's broader efforts to restrict adversarial access to critical computing power. Consequently, the physical security of these multi-billion-dollar data facilities remains highly uncertain amidst escalating regional conflicts, threatening to disrupt global supply chains and compromise Western technological dominance.

Comment

The US Bureau of Industry and Security licensing framework for advanced graphics processing units faces severe enforcement challenges when processing nodes are physically situated within the Persian Gulf. Deploying high-performance computing clusters running proprietary large language models in jurisdictions like the United Arab Emirates increases the risk of illicit technology transfer to Chinese state-backed actors. This physical proximity to non-aligned intelligence services compromises the integrity of hardware-level security measures, such as secure enclaves on Nvidia H100 chips, designed to prevent unauthorised model weights extraction.

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