America’s AI controls risk stalling the Gulf’s billion-dollar vision

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America’s AI controls risk stalling the Gulf’s billion-dollar vision

America’s AI controls risk stalling the Gulf’s billion-dollar vision
US National Security Adviser Jake Sullivan talks about AI during a news briefing on Jan. 13, 2025 in Washington. (AFP)
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The US government’s new controls on artificial intelligence chips arrive at a peculiar moment for the Gulf. The region has committed billions to becoming a global AI hub, yet Washington’s latest policy effectively tells it to wait its turn.

The framework announced this week relegates most of the world — including the Gulf states — to a secondary tier, permitted to purchase only 50,000 advanced AI chips annually. Meanwhile, 18 privileged nations, mostly close US allies, enjoy unlimited access.

This arbitrary ceiling comes just as the region’s universities, research centers, and sovereign wealth funds are making unprecedented investments in AI infrastructure.

The oversight appears particularly shortsighted given the Gulf’s strategic advantages. Saudi Arabia, for example, with vast land availability and energy costs at about $0.048 per kilowatt-hour — a fraction of Western rates — is perfectly positioned to become a global hub for AI data centers.

First-mover advantage in this critical 21st century infrastructure could prove more valuable than unrestricted chip access.

Consider the scale of investment. Saudi Arabia and the UAE have emerged as two of the world’s most ambitious investors in AI infrastructure. The UAE has built 235 megawatts of data center capacity, while Saudi Arabia has reached 123 megawatts. These are not speculative ventures — they represent serious, long-term commitments to becoming global AI hubs.

The quality of these investments is as significant as their scale. The recent partnership between Saudi Arabia’s Public Investment Fund and Google Cloud to create a new global AI hub demonstrates the sophistication and forward-looking nature of Gulf AI initiatives.

Similarly, Saudi Arabia’s collaboration with US-based Groq to build the world’s largest specialized AI data center shows a very clear preference for working with American technology leaders.

But perhaps the outgoing Biden administration has left the door ajar. These controls come with a 120-day implementation window — leaving plenty of time for the new administration to reassess its approach to America’s key Gulf allies.

Besides, recent developments in China offer a lesson in how technology restrictions can have unintended consequences. Despite facing the strictest US controls, Chinese AI startup DeepSeek has made remarkable progress. Its latest large language model approaches Western capabilities, all while using just a 10th of the computational resources, a feat accomplished through clever mathematics rather than raw processing power.

Saudi Arabia’s collaboration with US-based Groq to build the world’s largest specialized AI data center shows a very clear preference for working with American technology leaders.

Adrian Monck

This breakthrough should be on the radar of every country facing these new restrictions. DeepSeek’s achievement suggests that the path to AI leadership may not run through hardware dominance after all. Its team improved chip efficiency by 60 percent in six months when faced with hardware limitations. Innovation, it seems, is still possible under constraint.

The timing is particularly relevant for the Gulf. The region’s advantages are clear. It has emerging world-class universities — like Saudi Arabia’s King Abdullah University of Science and Technology and the UAE’s Mohamed bin Zayed University of Artificial Intelligence — significant capital resources, and growing pools of young, technical talent.

These may ultimately prove to be the long-term formula for AI success. If algorithmic innovation, rather than graphics processing unit brute force, will shape AI’s future, then investments in education and research will take on even greater importance.

DeepSeek developed its latest model for just $6 million — “a joke” according to OpenAI’s Andrej Karpathy — while Western tech giants spend hundreds of millions on similar projects. An efficiency-first approach aligns naturally with the region’s emphasis on sustainable technological development.

The US strategy seems predicated on an outdated notion of technological development — that controlling hardware access ensures controlling outcomes. Yet history suggests otherwise.

The Soviet space program achieved remarkable successes despite enormous technological restrictions, compensating through innovation. Ancient China’s attempts to restrict access to silk production technology met with failure.

Recent breakthroughs underline the stakes. OpenAI’s latest model scored 88 percent on complex reasoning tests, whereas previous systems managed just 5 percent, suggesting we are entering a critical phase in AI development. Its CEO Sam Altman believes artificial general intelligence — systems matching human capabilities — could emerge within four years.

This timeline makes the current administration’s attempt to create a hierarchical “AI world order” particularly short-sighted. Subordinating the region’s technological sovereignty to an arbitrary quota system, especially as it invests heavily in developing domestic AI capabilities, seems almost designed to alienate friends.

A more constructive approach would recognize that states like Saudi Arabia and the UAE are not just seeking to acquire AI capabilities — they’re building comprehensive AI ecosystems that could complement and strengthen US leadership in this critical technology. Their combination of capital, strategic vision, and commitment to working with Western partners makes them ideal partners in expanding the reach of responsible AI development.

The incoming Trump administration has an opportunity to recalibrate this policy. Rather than maintaining restrictions that complicate natural technological partnerships, a revised approach could focus on deepening collaboration with serious, well-resourced partners. The administration’s emphasis on deal-making and economic engagement suggests it would recognize the strategic value of such cooperation.

Adrian Monck is a senior adviser at the Mohamed bin Zayed University of Artificial Intelligence and authors the geopolitics newsletter, Seven Things.


 

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view

NGOs, civil society groups urge EU to end trade with Israeli settlements

NGOs, civil society groups urge EU to end trade with Israeli settlements
Updated 8 min 49 sec ago
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NGOs, civil society groups urge EU to end trade with Israeli settlements

NGOs, civil society groups urge EU to end trade with Israeli settlements
  • Bloc is violating ICJ ruling by allowing goods to enter European market, letter warns
  • Human Rights Watch: EU should ‘live up to its obligations under international law’

LONDON: More than 160 NGOs, civil society groups and trade unions have urged the EU to ban trade with illegal Israeli settlements in the Occupied Territories.

The appeal came in a letter addressed to European Commission President Ursula von der Leyen.

She was urged to take action to ensure that Europe complies with international law by ending its support for Israel’s illegal settlement enterprise.

It comes amid renewed international attention on the Palestinian question in the wake of the Gaza ceasefire.

Palestinians “continue suffering” in the enclave despite the “fragile” ceasefire, while in the West Bank Israeli authorities have “expanded their illegal settlements and intensified their repression of Palestinians,” Human Rights Watch said.

EU member states have repeatedly condemned Israeli settlements through unanimous voting. Two rounds of targeted sanctions against Israeli settlers were also launched by the bloc.

Last July, the International Court of Justice ruled that Israel’s occupation is illegal, and called for the dismantling of settlements.

States have an obligation to prevent trade “that assists in the maintenance of the illegal situation created by Israel in the Occupied Palestinian Territories,” the court said.

Existing EU policies breach this obligation, groups said in the letter, warning that goods exported from Israeli settlements are not excluded from entering the European market.

HRW said: “Amid sharp divisions, the EU has been unable to adopt measures that respond to Israel’s war crimes, crimes against humanity and acts of genocide in Gaza.

“But the bloc should at least be coherent with its own statements, and live up to its obligations under international law, by banning trade and business with settlements, which are inexorably linked to egregious rights abuses.”


Former NATO chief Jens Stoltenberg returning to government in Norway as finance minister

Former NATO chief Jens Stoltenberg returning to government in Norway as finance minister
Updated 15 min 45 sec ago
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Former NATO chief Jens Stoltenberg returning to government in Norway as finance minister

Former NATO chief Jens Stoltenberg returning to government in Norway as finance minister
  • Stoltenberg led NATO from 2014, until he handed over to current Secretary-General Mark Rutte at the beginning of October
  • He is returning to government after Norway’s governing coalition split last week with the junior partner

OSLO: Former NATO Secretary-General Jens Stoltenberg said Tuesday that he is returning to government in his native Norway as finance minister.
Stoltenberg led NATO from 2014, until he handed over to current Secretary-General Mark Rutte at the beginning of October. Before leading NATO, Stoltenberg was Norway’s prime minister.
His term at NATO was repeatedly extended to keep a steady hand at the helm after Russian launched its full-scale invasion of Ukraine in 2022, thwarting plans for Stoltenberg to take over as head of Norway’s central bank.
He is returning to government after Norway’s governing coalition split last week with the junior partner, the Center Party, announcing its departure, in a dispute over European Union energy market regulations.
That left current Prime Minister Jonas Gahr Store, the leader of Stoltenberg’s center-left Labour Party, with several Cabinet posts to fill, among them that of outgoing Finance Minister Trygve Slagsvold Vedum, the leader of the Center Party.
Stoltenberg and Gahr Store appeared together at an event in Oslo on Tuesday, where the prime minister was presenting his new team, but Gahr Store didn’t explicitly mention Stoltenberg’s new job.
But in a statement released by the Munich Security Conference in Germany, which Stoltenberg was due to take over shortly, Stoltenberg said he was “deeply honored to have been asked to help my country at this critical stage.”
“Having carefully considered the current challenges we face, I have decided to accept Prime Minister Store’s request to serve as his Minister of Finance,” he said. “I will return to the Munich Security Conference and to my other responsibilities when my tenure is over. I am grateful for the decision to temporarily release me from my duties while I serve my country once again.”


Pakistan PM orders delivery of Ramadan relief package 2025 sans public utility stores

Pakistan PM orders delivery of Ramadan relief package 2025 sans public utility stores
Updated 30 min 23 sec ago
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Pakistan PM orders delivery of Ramadan relief package 2025 sans public utility stores

Pakistan PM orders delivery of Ramadan relief package 2025 sans public utility stores
  • Sharif instructs food ministry not to use services of utility stories due to complaints of corruption last year
  • Ramadan relief package includes price reductions on essential commodities such as wheat, sugar, oil and pulses

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif on Tuesday directed the ministry of national food security to begin preparations to deliver a Ramadan relief package of subsidized food items to low-income groups without using state-owned utility stories to avoid corruption and customer complaints. 

The annual Ramadan relief package includes subsidies and price reductions on essential commodities such as wheat, sugar, oil, and pulses, among other items, and is usually administered through utility stores. However, each year, consumers complain of long queues, limited stock availability, substandard food items, and difficulties with the process of identification verification needed to receive the discounted package at utility stores. 

Other than in Ramadan also, utility stores have been plagued by reports of corruption and mismanagement for years, with consumers complaining of substandard merchandise being sold and staff accused of vending subsidized products in the open market.

“Ramadan is around the corner and for that I have entrusted the ministry of food security with the responsibility to prepare a Ramadan package without [state-owned] utility stores so that there is no corruption and there is no distribution of spoilt goods,” Sharif said in a televised address to his cabinet. 

“This [distribution of Ramadan goods] cannot continue through utility stores. During last year’s Ramadan, there were countless complaints and now we have found a solution to this that we will introduce a [Ramadan] package minus utility stores.”

Once the food ministry prepares the Ramadan Relief Package 2025, it will be presented to the National Economic Coordination Committee for approval.

Last year, the Sharif-led government announced a “historic” Ramadan package with a subsidy of $26.8 million (Rs7.5 billion) to lower the prices of essential items for over 30,96,00,000 families.

During Ramadan in Pakistan, there is a significant increase in the demand for essential food items at subsidized prices, which overwhelms the capacity of utility stores, causing long lines and potential shortages. 

Ensuring equitable distribution of the package across different regions and demographics can also be difficult in a country of 241 million people, sometimes leading to some areas receiving less benefits than others. To prevent abuse, the government implements strict verification processes like CNIC checks, which also leads to delays and inconvenience for customers. 

The allocated stock of subsidized items at utility stores is also often not sufficient to meet the high demand during Ramadan, leading to disappointment for customers who cannot purchase everything they need. 


Rwandan-backed group declares ceasefire in DRC’s war-torn east

Rwandan-backed group declares ceasefire in DRC’s war-torn east
Updated 23 min 36 sec ago
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Rwandan-backed group declares ceasefire in DRC’s war-torn east

Rwandan-backed group declares ceasefire in DRC’s war-torn east
  • Last week, the M23 and Rwandan troops seized Goma – the provincial capital of North Kivu
  • Fighting has stopped in the city but clashes have spread to the neighboring province of South Kivu

GOMA, DR Congo: Rwandan-backed armed group M23 announced a humanitarian “ceasefire” from Tuesday in DR Congo’s perennially explosive east, days before a planned crisis meeting between Congolese President Felix Tshisekedi and Rwandan President Paul Kagame.
Last week, the M23 and Rwandan troops seized Goma – the provincial capital of North Kivu, a mineral-rich region that has been blighted by war for over three decades.
Fighting has stopped in the city of more than a million but clashes have spread to the neighboring province of South Kivu, raising fears of an M23 advance to its capital Bukavu.
A political-military coalition of groups called the Alliance Fleuve Congo (River Congo Alliance), of which M23 is a member, said in a statement late Monday that it would implement “a ceasefire” from the next day “for humanitarian reasons.”
It added that it had “no intention of taking control of Bukavu or other localities,” despite the M23 having said last week that it wanted to “continue the march” to the Congolese capital, Kinshasa.
In more than three years of fighting, half a dozen ceasefires and truces have been declared, before being systematically broken.
The Kenyan presidency announced on Monday that Tshisekedi and Kagame would attend a joint extraordinary summit of the East African Community (EAC) and the Southern African Development Community (SADC) in the Tanzanian city of Dar es Salaam on Saturday.
Amid fears of a regional conflagration, the 16 member countries of the southern African regional organization had called on Friday for “a joint summit” with the eight countries of the East African Community, of which Rwanda is a member.
According to a local source in Bukavu interviewed by AFP, the city “remains calm for the moment” but information suggests the M23 was “reorganizing itself with troop reinforcements and weapons to go to the front now that fighting has ceased in Goma.”
In South Africa, President Cyril Ramaphosa vowed on Monday to continue providing support to the Democratic Republic of Congo in the face of nationwide calls to withdraw Pretoria’s troops following the deaths of 14 South African soldiers.
Most of those killed were part of an armed force sent to the eastern DRC in 2023 by the SADC bloc.
“A ceasefire is a necessary precondition for peace talks that must include all parties to the conflict whether they are state or non-state actors, Congolese or non-Congolese,” Ramaphosa said.
“Diplomacy is the most sustainable pathway to achieving a lasting peace for the DRC and its people.”
Amid an ongoing war of words between Ramaphosa and Kagame, Rwandan government spokeswoman Yolande Makolo reacted strongly to the South African leader’s statement.
“You are sending your troops to fight Tshisekedi’s war to kill his own people,” she said to Ramaphosa on X.
Kagame has said that South African troops have no place in eastern DRC and are a “belligerent force engaging in offensive combat operations to help the DRC government fight against its own people.”
A UN expert report said last year that Rwanda had up to 4,000 troops in the DRC, seeking to profit from the mining of minerals – and that Kigali has “de facto” control over the M23.
Eastern DRC has deposits of coltan, the metallic ore that is vital in making phones and laptops, as well as gold and other minerals.
Rwanda has never admitted to military involvement in support of the M23 group and alleges that the DRC supports and shelters the FDLR, an armed group created by ethnic Hutus who massacred Tutsis during the 1994 Rwandan genocide.
South Africa dominates the SADC force, which is estimated to number around 1,300 troops, but Malawi and Tanzania also contribute soldiers.
The United States announced Monday it was further reducing its staff at its embassy in Kinshasa.


Pakistan issues electric vehicle production licenses to 57 manufacturers

Pakistan issues electric vehicle production licenses to 57 manufacturers
Updated 57 min 31 sec ago
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Pakistan issues electric vehicle production licenses to 57 manufacturers

Pakistan issues electric vehicle production licenses to 57 manufacturers
  • Pakistan has said it will cut power tariff for operators of EV charging stations by 45 percent as part of ongoing reform of energy sector
  • BYD Pakistan says up to 50 percent of all vehicles bought in Pakistan by 2030 will be electrified in some form in line with global targets

ISLAMABAD: Pakistan has granted licenses to 57 manufacturers of electric vehicles (EVs), state media reported on Tuesday, as the government moves to transition to green transport solutions and beat climate change. 

The government of Pakistan approved an ambitious National Electric Vehicles Policy (NEVP) in 2019 with the goal of electric vehicles comprising 30 percent of all passenger vehicle and heavy-duty truck sales by 2030, and an even more ambitious target of 90 percent by 2040. For two- and three-wheelers, as well as buses, the policy set a goal of achieving 50 percent of new sales by 2030 and 90 percent by 2040.

“The government is focusing on expanding local EV production, with licenses issued to fifty five manufacturers for two and three-wheelers, and two for the assembly of four-wheelers,” Radio Pakistan said in a report. “A plan is under consideration for establishing charging stations, including fast chargers and battery swapping stations.”

The report said under a new EV policy, free registration and exemption from annual token fees and toll taxes would also be offered to consumers. 

“There is a plan to create at least one electric vehicle zone in each province, including Islamabad,” Radio Pakistan added. 

A Senate Standing Committee last week criticized a lag in the production of EVs in Pakistan, saying only 60,000 had been produced by this year against a target of 600,000.

Last month, Pakistan said it would cut the power tariff for operators of EV charging stations by 45 percent as part of the ongoing reform of the energy sector designed to boost demand. The government is also planning to introduce financing schemes for e-bikes and the conversion of two- and three-wheeled petrol vehicles.

The cabinet on Jan. 15 approved a reduced tariff of 39.70 rupees ($0.14) per unit, down from 71.10 rupees previously, which will be in place within a month. The government expects an internal rate of return of more than 20 percent for investors in the sector.

According to a report submitted to the government by power ministry adviser Ammar Habib Khan and reported by Reuters on Jan. 15, there are currently more than 30 million two- and three-wheeled vehicles in Pakistan, which consume more than $5 billion worth of petroleum annually.

The energy ministry plans to convert 1 million two-wheelers to electric bikes in a first phase, at an estimated net cost of 40,000 rupees per bike, according to the report, saving around $165 million in fuel import costs annually.

BYD Pakistan, a partnership between China’s BYD and Pakistani car group Mega Motors, told Reuters in September up to 50 percent of all vehicles bought in Pakistan by 2030 would be electrified in some form in line with global targets.