The United Arab Emirates’ ambition to become a global leader in AI technology is not a secret. The country continues to make important moves, both on the business and regulation fronts, to transform into one of the world’s most digital-friendly nations. AI seems to be at the forefront of this national drive, and the leadership in this tiny but rich gulf state is engaging in some strong diplomacy to acquire the technology.

On 23 September, the UAE’s leader, Sheikh Mohamed bin Zayed al-Nahyan, arrived in Washington for an official visit. Among many other things, discussions on acquiring US-made AI technology were top of the agenda. There are now signs that the US is also willing to listen to such requests and possibly to cooperate.

President Joe Biden, while facing the cameras in the Oval Office, said that the “UAE is a nation of trailblazers, always looking — always looking to the future, always making big bets. And that’s something our countries have in common and our people have in common. In fact, it’s a cornerstone of our growing cooperation in AI.”

And it is a growing cooperation indeed. During the same visit the national security advisors of both countries also met and discussed the advancement of a safe, secure and trustworthy AI and other advanced technologies. They agreed to prepare an official memorandum of understanding on AI between the US and the UAE, a separate White House statement said.

Regulation a part of the ‘AI package’

In total, the two sides have agreed on cooperation in eight areas of AI, including ethical research and innovation, safety, security and trust, alignment of regulatory frameworks, cooperation in cybersecurity, facilitation of investment opportunities, clean energy and sustainable development.

From the list above, one particular area stands out and is of significant importance. The US is not just willing to sell AI technology to the UAE. Its also keen to make sure there is an alignment of the required regulatory frameworks that will ensure the legal and ethical use of that technology.

There are two possible reasons for this. China is one of them. Authorities in Washington, as well as US tech firms, are extremely wary of any possibility of US-made AI technology being leaked to China. Over the last decade Washington has repeatedly accused Beijing of indulging in campaigns aimed at stealing US technology and trade secrets.

“AI and new changes in cloud computing, etc, are going to change the way the world looks. We cannot let this sort of wave of technological breakthroughs pass by us.”

Ahmad Gargash, diplomatic advisor to UAE leader

These concerns forced US authorities to ban American firms from openly exporting cutting-edge AI chips to certain countries, fearing that the technology might end up in Chinese hands. Last year, the UAE was also added to the list of countries restricted from importing suchchips. However, companies who do have a license can still do business with the gulf nation.

Second, Washington wants to make sure that any US-made technology, especially AI, is used ethically, and within specific legal frameworks. The White House statement last week made a reference to this point by mentioning the promotion of ethical AI research and development between the US and the UAE.

It said the two countries will “conduct ethical AI research and development by prioritising research addressing bias, discrimination, and ensuring fairness in AI algorithms.”

One of the major issues with the use and application of AI globally has been that the technology is developing at a far greater speed than the legislative frameworks that should dictate its use. Washington wants to address that issue by ensuring agreement, and alignment, on mutual regulatory frameworks when exporting the technology abroad.

AI as alternative revenue stream?

There is a growing desire among some of the oil-rich gulf nations to decrease dependency on hydrocarbons, and find other alternatives for revenue generation. Saudi Arabia has announced some of the most courageous plans in this regard. And the UAE, though a much smaller nation in size and wealth, is no less ambitious.

Ahmad Gargash was part of the delegation that accompanied the UAE leader on his visit to Washington. He is the diplomatic advisor to Sheikh Mohamed bin Zayed, and is someone who understands the need to transform the gulf state’s economic model. He was quoted by the Financial Times saying:

“AI and new changes in cloud computing, etc, are going to change the way the world looks. We cannot let this sort of wave of technological breakthroughs pass by us. If we believe that hydrocarbon is on the way out, slowly but surely, then we have to replace the revenue stream through something else,”

And it seems like the leadership in the UAE have realised that AI can, potentially, be one of alternative revenue streams. This is partly evident by the serious amount of money the country is investing in AI.

Take G42 for example, one of the UAE’s largest and most ambitious AI firms. On its website, it calls itself “a global leader in creating visionary artificial intelligence for a better tomorrow.” It also claims to promote AI as a ‘force for good’, something that helps and enables the human society.

The firm attracted a $1.5 billion investment from Microsoft earlier this year. As part of the agreement, Microsoft will help establish an AI academic research centre in the UAE. It will also expand its “AI for Good Research Lab” into Abu Dhabi, according a statement by G42.

Separately, G42 has also recently announced it will be engaging in a joint effort with US firm NVIDIA “to advance climate technology with a focus on developing AI solutions aimed at dramatically enhancing the accuracy of weather forecasting globally.” NVIDIA will be establishing “an operational base and a Climate Tech Lab” in Abu Dhabi as part of the agreement.

Also this month, MGX, a UAE-based AI investment firm, announced it was partnering with Back Rose, Global Infrastructure Partners (GIP) and Microsoft to establish the Global AI Infrastructure Investment Partnership (GAIIP). The project aims to “make investments in new and expanded data centers to meet growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities,” according to the announcement.

The initial investment is said to be $30 billion, with the potential to raise up to $100 billion through the project in the future. Also, some of these future data centres could potentially be built in the UAE. The country is already in a race with another neighbour, Saudi Arabia, to build state of the art AI data centres in the desert.

Market for compliance technology?

The UAE is already a major global financial hub. Some of the world’s largest financial institutions, including many major banks, have operations in the country. It now wants to acquire and import advance technologies, including AI, to establish an advanced global financial ecosystem.

Fintech goes hand in hand with compliance. You cannot do one without doing the other. And that brings us to a key point to wrap up this discussion. Without sounding like a formal investment advisor, one could argue, in light of everything said above, that the demand for compliance technology in the UAE will seriously increase in the near future.

“UAE is a nation of trailblazers, always looking — always looking to the future, always making big bets.”

US President Joe Biden

As we said earlier, the US is not just interested in selling AI technology. It wants to make sure that the buyer understands how to use it ethically and safely. Complying with these guardrails requires an understanding of and investment in regulatory frameworks that do not necessarily exist in countries and markets that wish to buy US-made technology.

The White House statement last week also points to this as a prerequisite. It calls for “further alignment of regulatory frameworks and rules for AI and related technologies to safeguard national security interests, enable trusted investments and entrepreneurship, and facilitate cross-border innovation.”

For the UAE to achieve its AI ambitions, investing billions in the technology alone may not be enough. It also has to take compliance seriously and invest in the regulatory frameworks that ensures this. If you have a business or a background in compliance you may want to keep an eye on this emerging market.