Could Gulf States Pivot to Silicon Manufacturing for AI?
Infrastructure requirements
Pax Silica centres on resolving three essential vulnerabilities in the technology manufacturing supply chain.
The initiative addresses critical minerals processing, with China controlling approximately 90% of global rare earth processing capacity.
The pact seeks to establish an alternative, Western-aligned supply chain for materials required for advanced chip manufacturing facilities.
This agreement focuses on manufacturing infrastructure and power supply requirements.
AI data centres and semiconductor fabrication plants require substantial energy resources, with consumption projected to triple by 2030.
Both the UAE and Qatar possess significant electricity generation capacity, which could support the large-scale manufacturing facilities and “compute farms” needed to develop next-generation AI models and process the chips that power them.
The agreement involves considerable capital deployment into manufacturing projects.
The Qatar Investment Authority oversees assets worth approximately US$524bn, while UAE sovereign funds manage more than US$1tn.
These financial vehicles are already being channelled into ventures such as “Stargate,” the US$500bn data centre project involving OpenAI and SoftBank, alongside a US$100bn collaboration between Abu Dhabi’s MGX, BlackRock and Microsoft focused on AI infrastructure manufacturing.
