meed-logo

line1 line2 line3
SIGN IN / REGISTER

DeepSeek complicates regional data centre choices

29 January 2025

Commentary
Jennifer Aguinaldo
Energy & technology editor

Register for MEED’s 14-day trial access 

DeepSeek, a Chinese-developed free artificial intelligence (AI)-powered chatbot, shot to fame over the past week.

According to users, it looks, feels and works very much like ChatGPT, the generative AI developed by US-based Open AI.

In addition to becoming a feasible option for those willing to try the app for work or fun, DeepSeek is understood to have been trained at a fraction of the cost – around $6m – compared to an estimated $100m for the latest version of ChatGPT.

The BBC has reported that DeepSeek’s founder, Liang Wenfeng, built up a store of Nvidia A100 chips, which have been banned from export to China since September 2022.

His collection, which some estimate has reached 50,000, helped his company build a powerful AI model by pairing these chips with cheaper, less sophisticated ones.

US officials have warned of the app’s security loopholes, while critics have pointed out that DeepSeek’s training parameters omitted events that took place in Tiananmen Square in 1989.

Nevertheless, the hardware architecture behind DeepSeek presents a crossroads for the region’s data centre operators, assuming US President Donald Trump does not overturn a new regulation restricting access to US-made advanced AI chips outside its closest allies.

Over $10.6bn-worth of data centres, some catering to hyperscalers such as Amazon Web Services and Microsoft, are planned to be developed and built across the GCC states, according to the latest available data from MEED Projects.

This is a conservative estimate, given potential investments such as the $5bn planned between US asset investment firm KKR and the UAE-based Gulf Data Hub.

It also excludes spending by government entities to develop AI capabilities in defence, security, healthcare and, plausibly, energy.

The new regulation implies that the GCC states are categorised as mid-ter countries, which means exports of 50,000 graphics processing units (GPUs) will apply between 2025 and 2027.

Individual companies from these countries will only be able to achieve higher computing capability if they comply with US regulations and obtain validated end user status.

A policy creating a scarcity of advanced chips may backfire and have the unintended consequence of driving less developed economies to be more efficient, as DeepSeek has demonstrated.

Pairing these powerful, expensive chips with more affordable ones sourced elsewhere to drive AI development is an option that is now on the table – not just in China but closer to home as well.  

Related read: AI chip restriction may slow down GCC data centre boom

READ MEED’s YEARBOOK 2025

MEED’s 16th highly prized flagship Yearbook publication is available to read, offering subscribers analysis on the outlook for the Mena region’s major markets.

Published on 31 December 2024 and distributed to senior decision-makers in the region and around the world, the MEED Yearbook 2025 includes:

> GIGAPROJECTS INDEX: Gigaproject spending finds a level
https://image.digitalinsightresearch.in/uploads/NewsArticle/13346430/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Qatar maintains stable growth heading

    6 February 2025

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13369431/main.gif
    MEED Editorial
  • SWPC and Acwa Power sign Ras Mohaisen contract

    6 February 2025

    State utility offtaker Saudi Water Partnership Company (SWPC) has awarded a contract to develop the Ras Mohaisen independent water project (IWP) in Saudi Arabia to a consortium led by Riyadh-headquartered utility developer Acwa Power.

    The state water offtaker received two bids for the contract in April last year.

    Spain's Acciona was the only other company that submitted a proposal for the contract.

    The Ras Mohaisen IWP will be able to treat 300,000 cubic metres of seawater a day (cm/d) using reverse osmosis technology.

    It will also include storage tanks with a capacity of 600,000 cubic metres, equivalent to two operating days, and an electrical substation.

    The build, own and operate project is expected to reach commercial operation by the second quarter of 2028.

    The developer consortium includes local firms Hajj Abdullah Ali Reza & Partners and Al-Kifah Holding Company. 

    The plant will be located in Al-Qunfudhah Governorate, about 300 kilometres south of Mecca, on the Red Sea coast in Saudi Arabia’s Western Region.

    Netherlands-headquartered KPMG acted as SWPC's financial adviser, with UK-based Eversheds Sutherland acting as the legal adviser for the project.

    Prince Hussam bin Saud bin Abdulaziz, emir of Al-Baha Region and Abdulrahman bin Abdulmohsen AlFadley, Minister of Environment, Water and Agriculture & chairman of the SWPC board of directors, signed today the Ras Mohaisen IWP project agreements.

    AlFadley said the project will enhance the water supply chains, and it is intended to serve the residents and visitors of Mecca and Al-Baha regions.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13369351/main.jpg
    Jennifer Aguinaldo
  • Tech takes centre stage

    6 February 2025

    Commentary
    Colin Foreman
    Editor

    Read the February MEED Business Review

    An incoming US president always presents new challenges for the region as leaders adjust to shifting policies emanating from Washington.

    In 2025, the situation is different. It is the first time since Grover Cleveland in 1893 that a former US president has returned to office after a period away from the White House. In theory, this means that although the presidency has changed, it is a president the region has worked with before and should be familiar with.

    In practice, Donald Trump proved unpredictable during his first term, with significant challenges emerging for the region. During his 2017-20 presidency, the Gulf diplomatic dispute with Qatar began, the nuclear deal with Iran was scrapped and the Abraham Accords were signed.

    Trump also proved to be transactional and pro-business. During the early days of Trump 2.0, there have been clear signals that the new administration will have a different approach when dealing with big tech and the ever-expanding role of China in the global economy.

    The Gulf has already identified that the tech sector plays to the region’s strengths and promises to solve many of its structural economic challenges. The region is rich in energy and capital and has begun to invest heavily in the expensive business of developing artificial intelligence (AI) and power-hungry data centres.

    Both have already aligned with Trump 2.0, with Damac founder and chairman Hussain Sajwani committing $20bn to data centres across the US and Abu Dhabi-backed Stargate announcing $500bn of investment in AI in what Trump calls the largest AI deal in history by far.

    The speed with which these deals were announced shows that the pragmatic business and political leaders in the Gulf have already responded to the change in administration at the White House. The challenge now shifts to maintaining the positive momentum with a president who is notoriously difficult to predict.

    READ THE FEBRUARY MEED BUSINESS REVIEW

    Trump unleashes tech opportunities; Doha achieves diplomatic prowess and economic resilience; GCC water developers eye uptick in award activity in 2025.

    Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes:

    > WATER & WASTEWATER: Water projects require innovation
    https://image.digitalinsightresearch.in/uploads/NewsArticle/13369338/main.gif
    Colin Foreman
  • Liquidity constraints force corporate banking shift

    5 February 2025

    Corporate lenders face a liquidity crunch as businesses struggle to maintain cash flow amid rising costs and tighter credit conditions. Credit constraints have worsened, with 5% of middle-market borrowers now heavily leveraged and unable to refinance, according to credit rating firm KBRA. At the same time, rising fraud and outdated payment infrastructures are compounding the liquidity challenge.

    Payment fraud losses are expected to reach $26.4bn by 2028, according to GlobalData, making cash flow forecasting even more unpredictable. Increasing cyber threats, unauthorised fund transfers and fraudulent transactions directly impact liquidity buffers, forcing businesses to enhance treasury functions.

    Slow settlement cycles and outdated infrastructure continue to choke liquidity, restricting businesses’ ability to manage cash flow. To stay competitive, lenders must rethink their support for corporate clients by ensuring faster access to funds, smarter risk controls and seamless financial integration.

    The pressure to deliver faster, more secure and smarter financial solutions is increasing. Innovations such as real-time payments (RTPs), artificial intelligence (AI)-driven risk models and embedded finance address these needs by enhancing liquidity management, improving credit allocation and streamlining cross-border transactions. Lenders that fail to adapt risk losing corporate clients to more agile competitors.

    ENTRIES CLOSING SOON: MENA Banking Excellence Awards 2025: Corporate & Investment

    AI reshapes liquidity strategy

    AI is transforming liquidity management, shifting from a compliance and fraud detection tool to a key driver of treasury optimisation. Lenders are using AI-powered forecasting to improve treasury operations, helping businesses anticipate cash flow needs, automate funding decisions and optimise capital allocation.

    HSBC’s AI-driven treasury solutions have improved forecasting accuracy by 92%, reducing liquidity risk for businesses operating across multiple markets. JP Morgan has also adopted AI-driven liquidity forecasting, enabling clients to optimise cash reserves and enhance working capital efficiency.

    AI optimises liquidity management while strengthening security, helping lenders counter fraud and financial crime in an increasingly digital landscape. Lenders are leveraging AI’s predictive power to detect anomalies and security threats before they escalate.

    Fraud detection remains a key priority as financial crime becomes more sophisticated. Many lenders are deploying AI to enhance fraud detection and risk mitigation. For instance, Mastercard and Stripe use AI-driven risk models, analysing over 1,000 transaction data points per second to detect fraud in real time.

    Integrating AI into treasury services not only enhances operational efficiency but also positions lenders as strategic partners, offering data-driven insights that strengthen corporate client relationships.

    Real-time payments drive liquidity optimisation

    RTPs are now central to working capital strategies, not just a speed upgrade. Corporate clients increasingly expect instant settlements and real-time liquidity visibility as standard banking features.

    The global RTP market is projected to surpass $700tn by 2028, according to GlobalData, as demand grows for seamless cross-border transactions, reduced credit dependency and faster cash conversion cycles. This shift is critical for treasury and finance teams, which require greater control over cash positions to navigate fluctuating market conditions.

    Payment infrastructure providers such as Swift GPI and Visa B2B Connect have already streamlined high-value international transactions, reducing settlement times from days to minutes. These advancements are reshaping corporate banking priorities, with lenders expected to embed real-time payment capabilities within their broader treasury services.

    ENTRIES CLOSING SOON: MENA Banking Excellence Awards 2025: Corporate & Investment

    Embed finance or lose relevance

    Corporate banking is shifting away from traditional, bank-led services as embedded finance transforms how businesses access payments, liquidity and credit directly within their operational platforms. By integrating financial products within enterprise platforms and enterprise resource planning (ERP) software, companies reduce dependence on external bank portals.

    GlobalData forecasts that corporate embedded finance will exceed $7tn by 2030, driven by demand for frictionless cash flow management, instant access to financing and automated treasury functions. Businesses are embedding banking services within their digital ecosystems, integrating payments, lending and cash management into their core platforms.

    Major banks are already adapting. Goldman Sachs and Citi have developed embedded lending and treasury tools that integrate directly into ERP systems, enabling businesses to initiate payments, access credit and manage liquidity without switching platforms.

    Banks that fail to embed financial solutions risk losing visibility over corporate transactions. Institutions that successfully integrate embedded finance into their offerings will strengthen corporate relationships and secure long-term revenue streams. Conversely, delaying digital integration may result in businesses managing financial operations independently within their own platforms, reducing banks’ role in liquidity management.

    How lenders must adapt to the liquidity shift

    The future of corporate banking is being shaped by AI-driven treasury solutions, real-time payments and embedded finance—all of which are rapidly transitioning from competitive advantages to industry standards.

    For banking leaders, this shift demands immediate action.

    Corporate clients are no longer just looking for lenders – they need strategic partners who can provide seamless liquidity management, intelligent forecasting and embedded financial solutions.

    Banks that embrace these innovations will strengthen corporate relationships, drive new revenue models and maintain relevance in a shifting financial landscape. Those that hesitate risk being replaced by more agile, tech-driven competitors offering faster, smarter and more integrated financial services.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13365421/main0951.jpg
    Sarah Rizvi
  • Read the February 2025 MEED Business Review

    5 February 2025

    Download / Subscribe / 14-day trial access

    Donald Trump’s return to the US presidency on 20 January 2025 is anticipated to have profound impacts on the Middle East. In the February issue of MEED Business Review, we provide an in-depth look at the major geopolitical challenges that the region presents, particularly in terms of US relations with Iran, and the interrelationship between the US, Israel and other regional actors. 

    What's more, we examine how the Trump 2.0 administration's focus on areas such as artificial intelligence (AI) regulation, data sovereignty and cryptocurrency – not to mention the ever-escalating US-China tech war – offers an opportunity for Middle East players to assert themselves in the global tech economy. Trump’s America First policies could slow the region’s AI ambitions, however, and to stay competitive, GCC states must step up investments in education, infrastructure and innovation.

    Indeed, for the UAE, investing in and developing AI infrastructure and applications is now a priority. Abu Dhabi recently launched a $6bn project that combines 5,200MW of solar and 19 gigawatt-hours of battery energy storage capacity to deliver 1,000MW of round-the-clock renewable power capacity, which will help to support the government's AI ambitions. 

    Our latest issue also includes a comprehensive report on the GCC's water and wastewater sector, where Riyadh-headquartered utility developer and investor Acwa Power has improved its lead as the pace of independent water project contract awards slows.

    This month’s exclusive 15-page market report focuses on Qatar. Doha has played an instrumental role in negotiations between Israel and Hamas in recent months, placing it front and centre of regional mediation, while efforts to ensure post-World Cup economic progress led to a strong project awards performance for the country in 2024.

    In this issue, the team also examines how the long-awaited ceasefire in Gaza has brought relief to the fraught situation in Palestine; finds that the appointment of jurist Nawaf Salam as prime minister holds the prospect of political and economic rehabilitation for Lebanon; and looks at how the development of Wynn's integrated resort in Ras Al-Khaimah is supporting an ongoing boom in the emirate's real estate sector.

    The February issue is packed with exclusive insight, too. Omran’s CEO Hashil Al-Mahrouqi explains how the agency's tourism development and hospitality projects will support Oman's Vision 2040; we round up the record signings that made 2024 the best year yet for contract awards in the region; and the latest edition of MEED's Economic Activity Index reveals that the UAE is maintaining its edge as 2025 gets under way.

    We hope our valued subscribers enjoy the February 2025 issue of MEED Business Review. 

     

    Must-read sections in the February 2025 issue of MEED Business Review include:

    > AGENDA: 
    > Trump 2.0 targets technology
    > Trump’s new trial in the Middle East
    > Unlocking AI’s carbon conundrum

    > CURRENT AFFAIRS:
    > Gaza ceasefire goes into effect
    > New Lebanese PM raises political hopes

    INDUSTRY REPORT:
    Water and wastewater
    > Acwa Power improves lead as IWP contract awards slow
    > Water projects require innovation

    > INTERVIEW: Omran’s tourism strategies help deliver Oman 2040 

    > PROJECTS RECORD: 2024 breaks all project records

    > REAL ESTATE: Ras Al-Khaimah's robust real estate boom continues

    > ACTIVITY INDEX: UAE maintains regional economic edge

    > QATAR MARKET REPORT: 
    > COMMENT: Doha works to reclaim spotlight
    > GOVERNMENT & ECONOMY: Qatar economy rebounds alongside diplomatic activity
    > BANKING: Qatar banks look to calmer waters in 2025
    > UPSTREAM: QatarEnergy strives to raise gas and oil production capacity
    > DOWNSTREAM: Qatar chemicals projects take a step forward
    > POWER & WATER: Facility E award jumpstarts Qatar’s utility projects
    > CONSTRUCTION: Qatar construction shows signs of recovery

    > MEED COMMENTS: 
    > Damac founder Sajwani puts America first with Trump’s second presidency
    > Dubai’s largest-ever contract award is vital for its future
    > AI underpins 5GW Abu Dhabi solar project
    > Saudi-Turkiye relationship could bolster projects market

    > GULF PROJECTS INDEX: Gulf projects market enters 2025 in state of growth

    > DECEMBER 2024 CONTRACTS: Monthly haul cements record-breaking total for 2024

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: Between the extremes as spring approaches

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/13356922/main2802.gif
    MEED Editorial