A World Where Computing Power Becomes the New Oil – Saudi Arabia’s AI Ambitions and the Global Digital Divide

I recently read an intriguing article that gave me a lot to think about. It discussed how Saudi Arabia is trying to establish new global influence through AI computing power instead of oil. This isn’t just a story about industrial transformation; it’s about the restructuring of power dynamics in the 21st century.

The most striking part of the article was the expression “computing power is the new oil of the 21st century.” It really makes sense when you think about it. In the past, coal powered steam engines, and oil moved cars; now, GPUs and data centers train AI. However, the distribution of this new “energy” is even more unequal than that of oil.

According to research from Oxford University, over 90% of the world’s AI data centers are operated by big tech companies in the US and China. Companies like Amazon (headquartered in Seattle), Microsoft (headquartered in Redmond), and Google (headquartered in Mountain View) in the US, and Alibaba (headquartered in Hangzhou) and Tencent (headquartered in Shenzhen) in China, essentially have a monopoly. Meanwhile, the entire continents of Africa and South America are in a state of ‘computing desert,’ highlighting the severity of this gap.

Personally, I am particularly concerned about three forms of dependency created by this gap. The first is linguistic dependency, where AI models are primarily trained on English and Chinese data, making it difficult for countries with minority languages to have AI that functions properly in their native tongue. The second is scientific dependency, as advanced research like drug development or climate modeling inevitably concentrates in developed countries with data centers. The third is military dependency, as developing AI weapon systems or cyber defense systems requires massive computing power, directly impacting national security.

Saudi Arabia’s Ambitious Challenge – From Oil Money to AI Money

In this context, Saudi Arabia’s moves are truly fascinating. Crown Prince Mohammed bin Salman has declared that they will export ‘computing power,’ the ‘new oil’ to replace ‘black gold,’ and it doesn’t seem like mere bluster. The three elements Saudi Arabia is promoting are quite convincing.

The first is vast capital. With a sovereign wealth fund of $900 billion, Saudi Arabia has ample capacity to invest boldly in AI infrastructure. The second is cheap energy, which is a significant advantage considering AI data centers consume enormous amounts of power. Saudi Arabia can supply electricity much cheaper than the US or Europe using its fossil fuels and desert solar power, providing a clear competitive edge. The third is expansive land, with endless deserts capable of hosting massive data center complexes the size of dozens of New York’s Central Park.

Saudi Arabia claims that the cost of conducting AI operations domestically will be “at least 30% cheaper than in the US.” They are currently constructing a $5 billion data center near the Red Sea and another complex targeting Asia and Africa on the opposite coast. In May, they even established a state-owned AI company called ‘Humain’ to coincide with President Trump’s visit to Saudi Arabia.

Saudi Arabia’s goal is to “capture about 6% of the world’s AI workload, becoming the third-largest AI hub after the US and China,” which would be a significant change if realized. Given that the US and China currently monopolize over 90%, 6% is a substantial share. Especially if they can absorb AI demand from the Middle East, Africa, and South Asia, it seems quite feasible.

The concept of a ‘data embassy’ that Saudi Arabia is considering to attract foreign companies is also intriguing. Allowing foreign companies to operate data centers under their own country’s laws rather than Saudi law is a pragmatic approach to alleviate security concerns about Saudi Arabia’s authoritarian regime. Many global companies have been hesitant to use data centers in the Middle East due to issues of data sovereignty and security.

The Middle East at a Crossroads Amid US-China Tensions

However, there is a critical obstacle to Saudi Arabia’s ambitions: American AI semiconductors. Without high-performance GPUs, which are essentially monopolized by Nvidia (headquartered in Santa Clara, California), AI data centers are impossible, and the US has not given final approval. Although initial approval was granted during President Trump’s visit to Saudi Arabia in May, the US is cautious due to Saudi Arabia’s closer ties with China.

In fact, Saudi Arabia is actively accepting Chinese investment in the AI sector. Chinese AI company DeepSeek (headquartered in Beijing) is using data centers owned by Saudi state oil company Aramco, raising significant concerns about technology leakage from the US perspective. In this situation, Saudi Arabia’s choice between the US and China will be a crucial variable.

On the other hand, the United Arab Emirates (UAE) has taken a completely different path. UAE’s AI company G42 (headquartered in Abu Dhabi) received approval to import AI chips from the US last year on the condition of completely removing Huawei equipment. As a result, they recently announced plans to build a large-scale data center with OpenAI (headquartered in San Francisco). President Trump even mentioned that “deals worth billions of dollars” would be made, indicating that the UAE has clearly chosen a pro-US stance.

I’m really curious about how these different choices by Middle Eastern countries will impact the AI ecosystem in the future. Whether Saudi Arabia can maintain its relationship with China while securing US AI chips, or whether it will fully integrate into the Western bloc like the UAE. Regardless of the choice, the potential for the Middle East to emerge as an AI hub seems sufficient.

In fact, I believe these movements have significance beyond mere technological competition. If oil was the core of geopolitical power in the 20th century, computing power seems set to take on that role in the 21st century. The fact that only 32 countries worldwide currently have high-performance data centers capable of training AI models means that the remaining 150 or so countries could become ‘resource-poor’ in the digital age.

Personally, I think this computing power gap could lead to more serious problems in the long run. Linguistic, scientific, and military dependencies will eventually lead to economic dependency, which is likely to connect to global inequality. If regions like Africa or South America remain ‘computing deserts,’ their economic development and technological innovation will inevitably be severely constrained.

In that sense, if Saudi Arabia’s challenge succeeds, it could at least create a crack in the US-China bipolar system. Although Saudi Arabia itself has the limitation of being an authoritarian state, it might be better than the current extremely skewed situation. Especially for countries in the Middle East, Africa, and South Asia, it means having a new option.

The unfolding of this “computing power war” is going to be truly fascinating. Whether Saudi Arabia can extend its influence from the oil era into the AI era, and how it will become a variable in the US-China AI dominance competition, will be worth watching. One thing is certain: the national competitiveness of the 21st century is likely to be determined not by traditional resources or manufacturing, but by computing power and AI technology.

This article was written after reading a news article, adding personal opinions and analysis.

Disclaimer: This blog is not a news outlet, and the content written reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no liability is accepted for any investment losses based on the content of this article.