From: allin
Recent US trips to the Middle East have highlighted a new era of engagement focused on AI and technology, driven by a strategic effort to counter China’s growing influence and foster economic partnerships [00:58:03].
Context of Middle Eastern Aspirations
Middle Eastern countries are rich in resources and capital, and intensely interested in diversifying their economies towards high-tech sectors, particularly AI [00:58:08]. Their leadership tends to be young, visionary, and future-oriented, with many elites educated in Western institutions like Oxford, Harvard, and Caltech [00:59:02]. They are actively pushing entrepreneurship, offering incentives like visas to attract talent and ideas to cities like Riyadh, Dubai, and Abu Dhabi [00:58:37].
Previous US Administration’s Approach
In October 2023, the Biden administration implemented export controls on semiconductors and GPUs to the region, requiring specific licenses for every export [00:59:44]. This policy was seen as hostile and standoffish, alienating these states and hindering their efforts to build local AI data centers [01:00:14]. This approach was criticized for potentially pushing Middle Eastern countries towards China, as they would seek Chinese tech stacks if denied American technology [01:00:46].
Geopolitical Implications
There’s an intense competition between the US and China in high-tech and security [01:00:40]. If the US restricts access to its tech stack, these countries will inevitably turn to the Chinese tech stack, such as Huawei plus Deepseek [01:00:56]. The belief is that winning technology battles means creating the largest ecosystem and making American technology the global standard [01:04:08].
A New Framework: AI Acceleration Partnership
As part of the recent Middle East trip, a new framework for an AI acceleration partnership was introduced to replace the previous export controls [01:01:40]. Key provisions of this framework include:
- Matching Investment: For every dollar invested in building AI data centers in the Middle East, a dollar must be invested in AI infrastructure in the United States [01:02:02]. This is seen as a significant win for accelerating US infrastructure buildout [01:02:16].
- American Ownership and Operation: At least 80% of the chips in the data centers built in the region must be owned and operated by American cloud service providers or hyperscalers [01:02:28]. This ensures that American companies will run the vast majority of the compute [01:02:38].
- American Tech Stack: The preference is for data centers to be built on an American tech stack, utilizing companies like Nvidia and AMD, which also improves the US balance of trade [01:03:41].
An example of this partnership is OpenAI’s collaboration with G42 on a 5-gigawatt data center campus in Abu Dhabi, where G42 plans a reciprocal dollar-for-dollar investment in AI infrastructure in the US [01:08:21].
Strategic Advantages for the US
This framework offers several strategic benefits for the United States:
- Funding US Infrastructure: It secures significant funding for American AI infrastructure, accelerating its development [01:02:16].
- Global Standard for US Tech: It ensures that American technology becomes the global standard, making it harder for competitors to catch up [01:03:52].
- Boxes Out China: By partnering with these resource-rich countries, the US can prevent them from aligning with China [01:03:33].
- Balance of Trade: Increased sales of American tech products to these data centers improve the US trade balance [01:03:47].
Addressing Concerns and Misconceptions
Concerns about “diversion” – the idea that GPUs or IP could be smuggled to China – are dismissed [01:05:25]. Middle Eastern countries have unlimited resources and ambition for their own AI development and do not need to smuggle GPUs [01:05:40]. High-end GPUs are large (e.g., NVIDIA NVL72 is 8 ft tall, 3600 lbs), making smuggling impractical [01:06:02]. Furthermore, China has likely already seen American tech, and the key is process technology, not reverse engineering from end products [01:06:38].
There’s also a discussion about the importance of respecting these countries’ sovereignty and their own timelines for societal development, rather than imposing Western moralistic views [01:11:32]. The approach of collaboration on business and technology is preferred over lecturing on how to run their societies [01:11:45].
Scale of Investment and Future Outlook
The amount of investment these countries are prepared to make in the coming decades is expected to dwarf investments from universities and retirement accounts [01:09:28]. These are not “dumb money” investors; they are strategic partners who want to build companies and be owners, both domestically and abroad [01:09:01]. The shift in US policy from alienating to partnering with these nations is seen as crucial for American economic and geopolitical interests [01:07:44].
AI and Energy
The discussion ties back to the broader theme of AI and technology’s role in economic and geopolitical shifts, emphasizing that scaling AI requires massive increases in energy production [01:25:12]. The US needs to rapidly increase its electricity production capacity to support AI and other technological advancements, as China is currently adding power production capacity equivalent to the entire United States every 18 months [01:26:35]. This focus on energy is considered the critical linchpin for unleashing abundance in labor, longevity, and food [01:25:24].