The future of power dynamics is not on traditional battlefields, but in the quiet, air-conditioned halls of data centers. In this new era, the strategic importance of military bases has shifted to the rows of servers and racks of processing units. Every deal for cloud access or advanced technology becomes a form of statecraft, aligning nations with specific technology ecosystems and excluding others.
The United States is utilizing AI infrastructure as a powerful tool in the Arabian Gulf, leveraging investment and capacity to shape regional security preferences. By combining governance safeguards with technological advancements, Washington aims to crowd out Chinese influence and set the rules for AI development and deployment. However, this leverage is delicate, and without resilience and compliance, these arrangements could become vulnerabilities or even aid adversaries.
To ensure the longevity of this new form of statecraft, U.S. policymakers must establish standardized deal structures with Gulf partners. These structures should integrate technical safeguards, strict governance, and contingency plans. By binding model weights to secure enclaves, tracking accelerators and workloads, and implementing snapback clauses for violations, the U.S. can turn its AI infrastructure into a lasting source of influence. This influence, quiet and scalable, could be more enduring than traditional military bases.
Data Centers: The New Strategic Assets
In 2024, Microsoft's $1.5 billion investment in Abu Dhabi's G42 was more than just a financial move. It came with an American board seat and governance assurances, pushing G42 to distance itself from Huawei. This is a prime example of AI statecraft, where capital and compliance align a partner's technology with U.S. security interests. As the U.S. reduces its military presence in the Middle East, a network of U.S.-backed data centers steps in to maintain influence quietly and effectively.
Why the Gulf? Why Now?
The Gulf region offers a unique combination of cheap energy for computing, sovereign wealth funds ready to invest, and governments eager to diversify their economies through AI. Saudi Arabia's launch of Humain and Abu Dhabi's MGX, backed by significant capital, demonstrate the region's commitment to AI. The real strategic advantage lies in the Gulf's ability to anchor an American technology stack at a crossroads where partners are balancing between Washington and Beijing. The first mover here sets the standards and dependencies for the future.
The Intersection of Capital, Compute, and Policy
Gulf investments are attracting Silicon Valley's attention, and U.S. platforms are building the infrastructure. The key factor is regulation. Executive Order 14110 directed the Commerce Department to enhance AI safety and security, including measures to collect information on foreign training runs and safeguard model weights. This order, combined with other regulations, raised compliance barriers, slowing Gulf partnerships while improving safeguards. In 2025, the White House shifted towards quicker approvals for trusted partners, signaling a more streamlined approach. The Department of Commerce's rescinding of the prior AI diffusion rule simplified the process, focusing on allies while maintaining control over specifics. The result is that partners operate on American terms, with rules that travel with the technology.
The Impact of Executive Order 14110
Executive Order 14110 set AI safety and security priorities, increasing oversight of sensitive computing and model development. In the Gulf, where speed and locality are crucial, these added steps changed incentives. Saudi and Emirati data regimes favored in-country hosting, especially for government and regulated sectors. Huawei's presence in the region offered immediate locality and a clear procurement path, making it an attractive option when U.S. pathways involved additional reviews. While not a mass migration, this executive order created a procurement tilt towards Chinese platforms for time-sensitive projects.
The Trump Administration's Shift
On January 23, 2025, President Donald Trump issued an order to remove barriers to American leadership in AI, revoking Executive Order 14110. This shift deprioritized centralized cloud reporting, favored streamlined licensing, and assumed that competitiveness with allies enhances security. In May 2025, the Commerce Department announced the rescinding and replacement of a pending global diffusion rule, which would have tiered countries and capped advanced AI chip shipments. The aim was to simplify the framework while keeping Chinese channels tight. This move allowed more accelerators to reach Gulf networks sooner, accelerating their AI development on an American stack.
Policy Evolution and China
While policy towards China remained strict, Washington revoked Taiwan Semiconductor Manufacturing Company's fast-track status for shipments to its Nanjing fab in September 2025. This forced case-by-case licenses, even for mature nodes, with similar waivers for Samsung and SK Hynix set to expire. The message was clear: Ease the path for allies, tighten the screws on China, and offer a credible U.S. alternative to Huawei-centric ecosystems.
Policy Clarification: Biden vs. Trump
The Biden era saw expanded export controls and the addition of cloud reporting direction through Executive Order 14110. While this constrained adversaries, it also risked ceding market share and influence to China where partners sought faster capacity. The Trump administration, by revoking the order, is replacing the diffusion rule with a simpler system for allies while maintaining pressure on China. The goal is to compete aggressively, undercut Chinese platforms, and use AI infrastructure to project U.S. power in the Middle East.
Understanding the Leverage
When partners accept U.S. safeguards, American influence grows. Microsoft's investment in G42 paired capital with a Huawei unwind, requiring governance changes and deeper audits. Azure became the operating platform, and chip approvals tied access to license conditions, restricting facility access by personnel from embargoed countries. Model access, data location, and administrator privileges become policy tools that can be audited or revoked, shaping market leverage through cloud governance and policy choices. Over time, these frameworks create dependencies, giving Washington real power when security is at stake.
Benefits and Risks
The benefits are clear: Partners get secure clouds built to U.S. standards, and Washington gains platforms for auditing and emergency control. Arabic-first models improve local services, reducing the appeal of Chinese alternatives. Scholarships and joint labs draw researchers into U.S. ecosystems, fostering long-term alignment. However, risks exist. Data centers, as argued by Alex Rough, are battlefields, and doctrine must catch up. Leverage comes from controlling chips, identity, and model weights, but resilience is crucial. Without it, these facilities become vulnerabilities, inviting cyber attacks and supply chain compromises. Governance risks, such as weak custody of model weights or sloppy key management, can undermine leverage. If partners misuse AI, congressional pressure could lead to lost influence and fractured cooperation.
A Comprehensive Policy Approach
For durable leverage, the deal architecture with Gulf partners should be standardized and enforceable. Keep advanced model weights in secure enclaves, log all accesses, and make logs accessible to U.S. auditors. Tie chip exports to attestation and tracking, and implement runtime telemetry. Build snapbacks into contracts to control compute access and sensitive features. Attach human rights audits and clear standards to financing and cloud credits. Share assurance burdens by funding partner security teams and labs, and certify local teams to U.S. standards. Treat cloud infrastructure as contested terrain, embedding multi-cloud redundancy and automated failover to allied zones.
The Gulf's Strategic Significance
The momentum is clear with Humain's launch, MGX's capital plans, and a steady stream of U.S.-Gulf tech announcements. The Gulf combines capital, low-cost power, and political will. Strategically, it anchors an American-aligned AI corridor connecting Europe, the Middle East, Africa, and South Asia. Here, standards and dependencies can be set for generations.
Conclusion
The contest over AI infrastructure in the Gulf is not just about market share or short-term gains. It's about defining the standards of trust, control, and resilience for a technology that will shape economies and security. Washington's advantage lies in its ability to combine cutting-edge technology with governance, but this must be treated as contested terrain. The challenge is to turn commercial deals into strategic architecture, resilient enough to withstand crises and partner temptations. If successful, silicon statecraft could give the U.S. a powerful tool for the 21st century.
