Winston Ma’s view
At the Future Investment Initiative summit in Miami in late March, geopolitics and technology investing collided in a single, blunt warning, when US presidential envoy Steve Witkoff said the region faced a “risk premium” from the threat of infrastructure such as data centers being “blown up.”
To understand why the Gulf’s investment thesis will survive data centers being bombed, we must recognize that these facilities are not simply commercial real estate; viewing hyperscale projects — like the $10 billion Public Investment Fund (PIF) partnership with Google Cloud, or the 5 gigawatt Stargate UAE campus — merely as financial joint ventures is a miscalculation.
They are, in fact, the foundational layer of a much larger, state-backed ambition of sovereign AI. Gulf sovereign wealth funds are not acting as passive allocators. They are helping to build what Nvidia CEO Jensen Huang calls a “five-layer cake” of national AI capacity spanning energy, compute, cloud infrastructure, AI models, and applications.
Data centers represent the critical middle layers. They are the “AI factories” where data and energy are converted into intelligence. When nations coordinate sovereign assets — from state-owned oil companies and utilities providing baseload energy, to funds like MGX anchoring the compute layer for the UAE — the result is a matter of essential infrastructure. The Gulf is building the entire cake, and the region’s governments will not abandon their most critical layers simply because the geopolitical temperature has risen.
The scale of commitment is extraordinary. The major Gulf sovereign wealth funds across Qatar, Saudi Arabia, and the UAE collectively manage close to $6 trillion. According to Global SWF, sovereign investors deployed $66 billion into AI and digitalization last year, with Middle East funds leading globally.
The war has been a resilience test. On March 1, Iranian drones struck Amazon facilities in Bahrain and the UAE, drawing headlines. But of the 233 data centers operating across the Gulf, only three were affected. Workloads were rerouted. The system absorbed the strike.
The real test, however, was not physical. It was whether commitments would hold. One week after the attacks, Brookfield Asset Management confirmed its $20 billion AI infrastructure partnership with Qatar Investment Authority would proceed as planned. The UAE government said there was “no change” to its investment plans or long-term economic priorities.
Gulf states have spent decades building sophisticated defence architectures which have taken down more than three times the amount of missiles and drones lobbed on Israel since the conflict began. Data centers are the beating heart of their sovereign AI stack and receive the same security priority as critical energy assets.
There is no denying the acute pressures, and Gulf officials acknowledge the conflict’s impact on energy and other critical infrastructure. But sovereign wealth funds are the ultimate purveyors of long-term capital. As PIF Governor Yasir al-Rumayyan reminded the Miami summit: “We measure our returns not in quarters, but in decades.” While Western private equity might flinch at short-term volatility, Gulf funds are designed to absorb shocks and hold conviction assets through disruption.
Astute investors are already looking past the smoke. Bill Ford of General Atlantic, for example, articulated the upside case that a negotiated settlement could produce an integrated Middle East economic zone, with the Gulf as the anchor of a stabilized digital economy. The data centers being stress-tested today would serve as foundational infrastructure for that.
Witkoff was right to highlight the immediate risk premium. But the true takeaway from the conflict so far is that the Gulf’s sovereign AI architecture has passed its first major stress test. Backed by long-term capital, strategic foresight, and $6 trillion in sovereign assets, the foundation is proving remarkably fireproof.
Winston Ma is the GPIFF Executive Director and Adjunct Professor at NYU School of Law and author of The Hunt for Unicorns: How Sovereign Funds Are Reshaping Investment in the Digital Economy
Notable
- Amazon AWS CEO Matt Garman said it worked around the clock to keep Middle East services up after Iranian drone strikes hit its data centers in Bahrain and the UAE in March.
- The UAE has poured $148 billion into artificial intelligence at home and abroad since the beginning of 2024.
- In the wake of the Iran war, Microsoft has called for new international rules to be drawn up to protect data centers and other elements of civilian infrastructure.