Matthew’s view
It has been impossible to ignore the ambitions of Gulf states aiming to become linchpins in the global AI arms race. Saudi Arabia has said it wants to be the third-biggest global compute hub, after the US and China. Abu Dhabi-controlled funds have poured billions into partnerships with Microsoft and BlackRock, and Qatar has invested in AI firms Anthropic and xAI. Each country has created its own AI champion.
Clearly, Gulf leaders see AI as a revolutionary technology that will reshape the world economy — much like their peers the world over. But in conversations with senior figures in the Gulf, I’ve noticed another, less remarked upon, tectonic shift underway that they anticipate, and which they are starting to mobilize their vast sovereign funds to monetize: entertainment.
In their techno-optimist view, AI revolutionizes our lives: Workers become more productive and richer, the working week gets shorter, and we all get healthier and live longer. That will leave us with more leisure time — and more money to spend enjoying ourselves.
Emirati, Qatari, and Saudi funds joining forces to back Paramount Skydance’s $108 billion hostile takeover offer for Warner Bros. Discovery wasn’t just a rare display of cooperation in a region more characterized by economic competition — it was the biggest display of their willingness to put their financial resources behind this investment thesis.
A similar strategy lies behind Saudi Arabia’s Public Investment Fund leading the more than $50 billion buyout of Electronic Arts, a deal that shocked many Saudi watchers who thought the sovereign wealth fund was lowering spending. But as that deal showed, conviction in the region is high that the next wave of giant companies, maybe even trillion-dollar firms, will not come from energy or technology, but from media and entertainment.
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Room for Disagreement
The entertainment industry has largely been viewing AI as a disruptor that could leave masses out of work. During Hollywood strikes in 2023, the Writers’ Guild of America described the moment as one of “existential crisis,” in part because of the rise of AI.
“I stress that this is an existential threat,” filmmaker Justine Bateman, who advises the powerful SAG-AFTRA on AI issues, said at the time. “And if they can do this with actors, they can do it with writers, directors, cinematographers — everyone. We’ll be replaced with Frankenstein spoonfuls of our own work.”
Notable
- Netflix’s acquisition offer for Warner Bros. Discovery is “the stupidest deal” in media history, The Information’s Co-Executive Editor Martin Peers said. “The price they’re paying is enormous, and it’s not going to add to anything. Almost anybody who can have Netflix has it already.”