AI investments surge in Saudi Arabia and UAE, despite supply chain challenges

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A new analysis by S&P Global Market Intelligence reveals that Saudi Arabia and the UAE are accelerating their investments in AI and semiconductor capabilities to boost their technology sectors. 

Despite setbacks due to US export restrictions, companies like Microsoft are eyeing AI-driven facilities, while data centres operated by Alibaba and Amazon are already operational.

Recent data shows a 7 per cent year-over-year drop in server and computer imports, totalling $3.2 billion as of June 2024. 

With US supplies restricted, firms from China and Hong Kong, which already provide 31.8 per cent of traditional servers, may fill the gap.

According to the report, both nations are positioning themselves as future chip manufacturing hubs. 

Saudi Arabia has partnered with Foxconn, while the UAE’s sovereign fund co-invested in GlobalFoundries. 

However, they face stiff competition from global powers like the US and Japan for semiconductor investments.

The report noted that challenges remain, particularly in securing manufacturing equipment, as mainland China dominates 47 per cent of global imports. 

Yet, delays in European projects may present opportunities, it stated. 

Meanwhile, local funds are collaborating with chip producers to address rising demand for non-AI systems.

For more insights, visit S&P Global Market Intelligence.