Hello and welcome to TechScape. Today in tech, we’re discussing the Persian Gulf countries jockeying for sovereignty over their own artificial intelligence in response to U.S. instability. Add to that the fact that US tech giants plan to spend over $600 billion this year alone.
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I spent most of last week in Doha for the Web Summit Qatarthe new Gulf version of the popular annual technology conference. One theme emerged from the speeches I watched and the conversations I had: sovereignty.
The conference founder set the tone for the Summit on the opening night: “Three years ago (when Web Summit Qatar started) people were talking about entering a multipolar world. We now live in a multipolar world,” said Paddy Cosgrave.
As proof, he referred to the fire reprimand of Donald Trump given by the Canadian Prime Minister, Mark Carney, in Davos a few weeks earlier. He highlighted the act that had preceded him on stage: dancing robots built by a Chinese company, which he called the most advanced in the world. Cosgrave also brought in two speakers who would play out the dynamic he mentioned. The Qatari prime minister announced a series of billion-dollar measures intended to promote startups in the country. Next came the Palestinian-Jordanian founder of UpScrolled, an insurgent TikTok competitor whose founder announced on stage that the app had surpassed 2.5 million users amid the crisis. confused backlash At new American entity of TikTok.
As the United States becomes an increasingly unstable country to immigrate to and start a business, the three major Gulf powers are showing off their multibillion-dollar investment in AI. Qatar is not the only one spending big. Last year, the UAE signed a deal with the United States for advanced chips that will fill one of the world’s largest data centers, built outside Abu Dhabi. Human, Saudi Arabia’s state AI company, has signed billions of dollars in deals to create a “full-stack AI ecosystem,” meaning the kingdom wants its own data centers, training data, cloud services and AI models, perhaps even its own chips. The aim of Sovereign AI – artificial intelligence under the control of its country of origin from start to finish – is self-explanatory.
The move towards greater AI capabilities in the Gulf, however, does not imply the end of cooperation with the United States. While I was there, a newspaper owned by members of Qatar’s ruling al-Thani family trumpeted a deal between Jared Kushner’s AI company, Brain Co, and Qatar’s Ministry of Municipality to automate building permits. The first line in history gives an idea of the message: “Qatar is growing in importance as a key player in the practical employment of artificial intelligence, leveraging partnerships that combine Silicon Valley expertise with local knowledge. »
Will the Gulf’s push for their own AI succeed? This was the second question on everyone’s lips. (The first, of course, was: “Is AI a bubble?“Several major factors work against the development of sovereign AI in the region. Regional access to semiconductor chips is limited, although it is increasing. whatever the cost. There isn’t enough local engineering talent in the region to fuel an AI industry, but Doha offers the source of Indian engineers a much more attractive time zone to connect with family than San Francisco, as well as a lower price point than Trump’s. $100,000 per visa. For building AI models, there is much less textual content in Arabic than in English.
Tech financiers, venture capitalists, are wondering where to invest money amid this upheaval. Participants in one of the panels I moderated had competing visions. A French venture capitalist has made the case for supporting startups in Europe and the Middle East. He and a German VC on another panel said investing in the United States had become more difficult in recent years because of huge valuations, which mean a lower percentage stake for investors. A partner at a venture capital fund that invests only in San Francisco companies argued that Silicon Valley companies possess a real moat that will repel challengers and therefore remain the best bets to place.
The Gulf is not alone in doing its best to build its own technology ecosystem. Europe is grappling with similar anxiety over sovereignty, spurred by Trump’s antagonism toward the region. But the bloc has crucial challenges ahead. The EU’s relatively strict technology regulations have led to some of the best privacy protections for its citizens in the world, but the continent’s tech sector is relatively weak in comparison with the laissez-faire US. Will the European Parliament sacrifice the privacy guaranteed by the project AI Law in favor of the deregulation that businesses say they need?
European governments invest far less than the cash-rich Gulf petrostates. Can EU businesses and governments replicate all the tools they need without a big influx of funding? France recently abandoned Zoom, Microsoft Teams, and Google Meet in favor of an app called Visio, which, coincidentally, is already the name of some diagramming software from Microsoft. Belgium and the Netherlands remain essential to the global semiconductor supply chain, even though they represent only part of it. Elon Musk’s Starlink dominates the continent as it attempts to boost local alternative Eutelsat, which has a long way to go to catch up with its US counterpart.
One notable exception to Europe’s delay at the Web Summit: London-based startup ElevenLabs, considered the developer at the forefront of AI-powered voice and music generation. The company’s Polish founder announced on day one that his company had closed a $500 million fundraising round, led by blue-chip U.S. firms including Maga-allied Andreessen Horowitz, which tripled ElevenLabs’ valuation.
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More than $600 billion in one year: tech giants’ staggering spending on AI continues to grow
Over the past two weeks of quarterly earnings calls, Alphabet/Google, Amazon, Microsoft and Meta have informed Wall Street that they will collectively spend more than $600 billion in the coming year, primarily on the infrastructure that underpins AI. The amount of money dwarfs what many governments around the world spend to run entire countries. Each company’s capital spending – money spent on fixed, physical assets (in this case, land, buildings and chips for data centers) – is equal to or higher than the last two years combined. Last year’s total for the four was $359 billion, and 2024’s was $217 billion, per Bloomberg.
Alphabet told Wall Street would spend between 175 and 185 billion dollars during the same period, almost double compared to last year. Meta grossed between $115 billion and $125 billion. Microsoft is expected to spend some $105 billion, Bloomberg reports.
Amazon stands out among the four by telling investors that its capital spending would increase the most, from $125 billion last year. to 200 billion dollars in 2026. The day before Amazon’s results, Jeff Bezos’ Washington Post licensed a third of its staff. The two companies are not directly related, but the contrast is stark. Bezos bought the Postal Service in 2013 for 0.125% of what Amazon will spend that year alone, or $250 million.
Even Tesla, an AI company in a more indirect sense than the others, revised its capital spending upwards to $20 billion, far more than analysts expected — or frankly desired, given the company’s situation. in decline income.
The numbers are astronomical, but there is reason to believe they will rise further. Take a look at the number of ads for AI products in the Super Bowlwho did his best to convince the Americans that they really like AI. The market for these products has not stabilized or become a sector where incumbents are unstable. AI is still a land grab, and the tech giants want to grab as much of it as they can.