Full-stack artificial intelligence (AI) capacity is now overwhelmingly concentrated in the United States and China. Together, the two countries produced 80 notable AI models last year. The United States alone operates 5,427 data centers, more than 10 times as many as any other country. Of the 33 countries that host any public-cloud AI capacity, only the U.S. and China run it on their own chips, with their own providers.
With no global consensus on AI likely to emerge soon, technological development will be governed through an increasingly fragmented landscape of national and regional AI rules. The U.S. takes a laissez-faire approach, while the European Union focuses on regulation and China on state direction. The rest of the world largely participates as a “rule-taker.”
However, the Gulf and Southeast Asia, neither of which builds the chips or trains the frontier models their AI ambitions require, are attempting to convert that role into leverage. AI cooperation between countries in the two regions is deepening, mutually beneficial, and reaching multibillion-dollar scale.
Southeast Asia and the Gulf are building a new kind of AI partnership, one that turns their different strengths into a shared advantage rather than chasing self-sufficiency at the frontier.
The two regions share similar dependencies but boast complementary strengths, including the resources to manage them. The Gulf has abundant capital, inexpensive energy, and the capacity to build infrastructure at speed and scale. Saudi Arabia alone is investing $100 billion in AI start-ups and data centers through its Project Transcendence. Southeast Asia has strong demand. Its digital economy is projected to exceed $300 billion in gross merchandise value by 2025. Moreover, its data-center market is forecast to more than double by 2030, from $13.7 billion to $30.5 billion.
Within the Gulf, the United Arab Emirates (UAE) has committed $148 billion to AI infrastructure over the past two years. Stargate UAE, a 1-gigawatt computing cluster that G42, Abu Dhabi’s state-backed AI group, is building with OpenAI, Oracle, NVIDIA, SoftBank, and Cisco, is expected to cost around $30 billion. G42’s Jais 2 model, trained on 600 billion Arabic tokens, is developing a homegrown Arabic-language AI ecosystem. The UAE’s advantage is the scale of wealth and the speed of its build-out.
Beyond its capital and infrastructure, the UAE also boasts substantial ties with Southeast Asia, particularly with Singapore, Malaysia, and Vietnam. In February of this year, G42 signed a framework agreement with a Vietnamese consortium worth up to $1 billion to build national AI and cloud infrastructure spanning government systems, industrial applications and academia, in addition to workforce upskilling programs.
Vietnam is well positioned to absorb such investment. Its standalone AI Law is already in force, and its national strategy aims to establish the country as a regional AI hub. Vietnam also hosts more than a quarter of Southeast Asia’s generative-AI start-ups.
Malaysia, which attracted $23 billion in data-center investment in 2024, has formal agreements with the UAE on AI and the digital economy. Masdar, Abu Dhabi’s state-owned clean energy company, signed a $15 billion agreement in January 2025 to develop renewables in the Philippines. Project mBridge, a cross-border digital-currency initiative, links the UAE, Thailand, and Saudi Arabia. The Joint Declaration on Economic Cooperation between ASEAN and the GCC explicitly endorsed cooperation in AI and the digital economy, giving the trend political backing.
Gulf investors are establishing long-term positions in high-growth digital markets, while Southeast Asia is gaining infrastructure, energy investment, and human capital. The relationship’s strength is its deal-by-deal structure, which matches a specific capability to a specific need and lets cooperation move without requiring region-wide consensus.
The recent Iran-U.S.-Israel conflict illustrates how quickly geopolitical events can reshape technology investment and supply chains. While the Gulf has demonstrated considerable resilience, the conflict has reinforced the importance of diversifying its economic partnerships and reducing its excessive dependence on any single market or geopolitical relationship.
Against this backdrop, Southeast Asia’s rapidly growing digital economy and the Gulf’s expanding role as a global investor in AI infrastructure are becoming increasingly complementary. A deeper Southeast Asia-Gulf AI partnership is therefore both an economic opportunity and a prudent strategy for enhancing resilience in an era of growing geopolitical uncertainty.
Recent research from the AI Asia Pacific Institute identifies the same pattern across the UAE-Singapore memoranda on digital government, UAE-Malaysia cooperation under the MADANI AI initiative, and the UAE-Vietnam framework.
A promising next step would be sectoral pilots, each region testing AI in the domain best suited to its own endowments, and learning from the other’s results. Southeast Asia, with its large underbanked populations and fast-growing fintech, is a natural testbed for financial inclusion and small-business credit. The Gulf, with its growing state capacity and legal digitization, is well placed to pilot AI in courts and public administration.
These pilots could generate practical lessons for both sides and operate through the bilateral agreements already in place. The same approach could extend well beyond finance and the courts to health, logistics, energy, and language models built for Arabic and Southeast Asian languages.
Full-stack and frontier AI capabilities remain beyond the reach of any single middle power, and both the Gulf and Southeast Asia are likely to remain dependent on foreign technology imports for the foreseeable future. But they have an opportunity to show, through cooperation, that middle powers can shape the AI economy with investment, trusted partnerships, and responsible deployment. The U.S. and China may define what AI can do, but Southeast Asia and the Gulf can help identify where AI delivers the greatest economic and social value.