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However whereas vitality benefit is a strong lure for hyperscalers – the cloud giants reminiscent of Google, Microsoft and Meta driving AI adoption – analysts say the Gulf’s ambitions face structural hurdles that transcend infrastructure.
OBSTACLES
To turn into important gamers in AI, Gulf states should navigate a thicket of challenges: replicating Western-style information governance, securing scarce superior chips underneath U.S. export controls, and attracting top-tier expertise in a fiercely aggressive international market.
These components, slightly than capital alone, will decide whether or not the area can translate its monetary firepower into significant affect within the AI ecosystem.
“The important thing part there we consider can be Qatar’s skill to emulate the American coverage on information privateness legal guidelines … if you look all over the world for the time being, the only largest hindrance to important AI deployment is the regulatory piece,” mentioned Stephen Beard, international head of information centres at Knight Frank.
Qatar has disclosed few particulars about Qai, however its timing displays surging demand for AI infrastructure as firms wager on the know-how to drive effectivity and minimize prices.
“The compute demand is so large that any new infrastructure buildout in an energy-abundant Qatar that fronts financing is welcomed information for American hyperscalers … On this section of the AI buildout, there’s room for a number of gamers,” mentioned Mohammed Soliman, senior fellow on the Center East Institute in Washington.
Nevertheless, analysts warn that capturing hyperscaler demand would require sustained funding and coverage alignment over a few years.
“We count on $800 billion to be spent on the AI information centre buildout within the Center East over the subsequent two years,” mentioned Dan Ives, analyst at Wedbush.
CHEAPER ELECTRICITY
Qatar’s aggressive edge lies in its low-cost electrical energy, which may offset the area’s excessive cooling prices in a desert local weather. Emirates NBD notes Center East PUE scores – a measure of information centre vitality effectivity – common 1.79 versus 1.56 globally.
Beard estimates Qatar may turn into a 1.5 to 2 gigawatt market by 2030 if it sustains low cost energy and accelerates improvement. By comparability, Saudi Arabia’s Humain goals for six GW by 2034, whereas the UAE’s G42 is constructing the primary section of a 5-GW AI campus, set to rank among the many world’s largest outdoors america.
Qatar’s progress might be notable if it reaches 500 megawatts by 2029, mentioned Jonathan Atkin, RBC’s international head of communications infrastructure, including that utilisation charges will matter as a lot as capability.
The UAE at present hosts 35 information centres, Saudi Arabia 20, and Qatar 5, in keeping with Emirates NBD. The U.S. is house to greater than 5,000.
With its sovereign wealth, Qatar brings monetary muscle however faces a steep climb towards entrenched rivals.
“I believe it’s truthful to say Qatar/Doha is the late entrant in a four-horse race,” mentioned Counterpoint Analysis director Marc Einstein, referring to Saudi Arabia and the UAE’s Abu Dhabi and Dubai. “It does have some benefits… however by way of volumes and scale, Qatar’s neighbours are in a a lot better place.”
“The U.S. needs a transparent line of sight into the place each chip is, who’s utilizing it, and what networks it touches. Meaning detailed reporting, on-the-ground checks, strict guidelines for technicians from high-risk nations … It is one thing the U.S. might be watching carefully over time,” Soliman mentioned.
Reporting by Utkarsh Shetti and Federico Maccioni in Dubai. Enhancing by Andrew Mills and Mark Potter
Our Requirements: The Thomson Reuters Belief Rules.
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