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Region plays high-stakes AI game

11 June 2024

This package also includes: Data centres meet upbeat growth

Artificial intelligence (AI) is a potential enabler for the economic diversification programmes of the GCC’s hydrocarbons-exporting states. 

The UAE launched an open-source large-language model (LLM) last year. Falcon 40B, shortly followed by Falcon 180B, cemented the reputation of the Abu Dhabi government-funded Technology Innovation Institute as a major player in generative AI.

With 180 billion parameters and trained on 3.5 trillion tokens, Falcon 180B soared to the top of the Hugging Face Leaderboard, a benchmark for pre-trained LLMs. Falcon 180B outperformed competitors such as Meta’s Llama 2 in areas including reasoning, coding, proficiency and knowledge tests.

The launch of Falcon followed cumulative investments in research, talent acquisition and digital infrastructure. In recent years, Abu Dhabi has formed government-attached agencies and commercial entities backed by its sovereign wealth funds to focus on AI.

One such company is G42, which has partnered with the US’ OpenAI to develop sector-focused generative AI models, and with Microsoft to run applications on Azure and undertake AI skilling initiatives in the UAE and beyond.

Global AI hubs

The UAE aims to become a world-leading AI hub alongside the US and China, but the country will have to tread carefully when choosing partners to avoid geopolitical complications involving its most important security ally and its largest energy client.

Riyadh seems determined to give Abu Dhabi a run for its AI money. The GCC region’s two largest states have placed
separate multimillion-dollar orders for graphics processing units – powerful chips designed for training AI – from top US supplier Nvidia.

They have also formed AI-focused investment vehicles with a view to maximising investments and returns from AI ventures at home and abroad. Abu Dhabi formed MGX, which aims to build $100bn in assets under management within a few years, while Saudi Arabia’s Public Investment Fund formed a $100bn platform to transform the kingdom into a semiconductor and electronics hub, with AI playing a central role in the plan.

In May this year, the Saudi Data & Artificial Intelligence Authority and New York-based technology company IBM launched an open-source Arabic LLM called Allam on IBM’s Watsonx AI and data platform.

With AI promising to be a $1tn market by 2030, it offers attractive opportunities

Computer power

A potential issue facing the determined push for AI leadership is that AI requires enormous computational power and energy, in addition to vast capital and talent.

A recent article published by the World Economic Forum (WEF) suggests that the computational power required to sustain the rise of AI doubles approximately every 100 days.

Related read: Global AI market to top $1tn in 2030

“The energy required to run AI tasks is already accelerating with an annual growth rate between 26% and 36%. This means by 2028, AI could be using more power than the entire country of Iceland used in 2021,” the WEF article says.

The AI lifecycle impacts the environment in two stages. First is the training phase, when the models learn and develop by digesting vast amounts of data; and second is the inference phase, when they solve real-world problems.

At present, the environmental footprint is split, with training responsible for about 20% and inference taking up 80%.

“As AI models gain traction across diverse sectors, the need for inference and its environmental footprint will escalate,” the WEF warns.

A peer-reviewed analysis in the science journal Joule says that a continuation of the current trends in AI capacity and adoption will likely result in Nvidia shipping 1.5 million AI server units a year by 2027.

When running at full capacity, these servers are expected to consume at least 85.4 terawatt-hours of electricity annually, which is equivalent to 100GW of installed capacity in the next three years.

Data centres, which make up the main AI digital infrastructure, already account for about 1%-1.5% of global electricity use.

In a hypothetical scenario in which everyone shifts to AI for mundane tasks such as performing searches on Google, every data centre would effectively experience a 10-fold increase in energy consumption, according to Alex De Vries, a data scientist at the Central Bank of the Netherlands, which conducted the analysis published by Joule.

As a result, the hydrocarbons-exporting and energy-transitioning GCC states – particularly the UAE and Saudi Arabia – appear to be a natural fit for AI, due to the presence of abundant and cheap fossil-fuel or renewable-energy resources, and the need to diversify their revenue sources away from oil. With AI promising to be a $1tn market by 2030, it offers attractive opportunities.

According to a Dubai-based senior executive with a global infrastructure investor, each country and company will eventually need to consider what part they can play in the AI value chain. 

Since Nvidia seems to have captured the microprocessor space, the other areas of opportunity are in developing computing power, algorithms and implementation. “Both Saudi Arabia and the UAE have the theoretical capability to grow into the computing power and implementation spaces, which require computing capacity through data centres and medium-skilled manpower to deploy, migrate, train and maintain [AI],” the executive says.

Greening AI

Policy adjustments could be needed to support such advances, especially when it comes to minimising AI’s carbon footprint, even as it enables the curbing of those in other sectors – including the power sector.

In addition to the vast computing and wattage requirements of AI, the region’s arid weather and very hot summer temperatures mean that regional data centres have greater cooling requirements.

To address this, the Dubai state utility has started to build a solar-powered data centre, which is understood to be the first of its kind in the world.

Saudi Arabia, which aims to have 58.7GW of renewable energy installed capacity by 2030 – accounting for about 50% of its electricity production mix – could follow a similar model. 

Abu Dhabi’s quantum computer project, in partnership with researchers at Spain’s Qilimanjaro Quantum Tech, is under way.

Unlike a classic supercomputer that operates on binary states, a quantum computer uses quantum mechanics phenomena including superposition and entanglement to generate and manipulate subatomic particles such as electrons or photons, or qubits. 

This allows greater processing powers that can enable the performance of complex calculations that would take much longer to be solved, consuming less power than a supercomputer.

The growing electricity surplus in Abu Dhabi, as all four reactors at the Barakah nuclear power plant come onstream this year, could also be allocated to data centres and AI applications.

In addition, Abu Dhabi’s plan to start procuring phase two of its Barakah nuclear energy plant may not only boost energy exports, but could also create sufficient margins to accommodate future AI computing demand.

Related read: Nuclear power will help region achieve AI ambitions

“I don’t know if that means only nuclear power can solve the demand, but it certainly is a good option and carries some strategic advantage as well,” says Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy.

While AI needs a significant amount of electricity for computations, there should be savings through productivity increases 

Efficiency gains

While it is difficult to accurately quantify and forecast AI’s overall carbon emissions, a holistic view of its overall environmental impact is required.

In theory, while AI itself needs a significant amount of electricity for computations, there should be savings through productivity increases. “Will people need to go to the office less often, and how about the improved performance of machines?” asks the Dubai-based infrastructure investor.

However, it is also important not to overstate AI’s potential benefits to the region’s economies. While AI could be a major driver of economic diversification, Young has yet to be convinced that it will significantly boost the GCC’s GDP growth.

Job creation is a vital element of economic diversification, she tells MEED, but AI is often used to replace roles in the service sector and lower-skilled opportunities, such as those in the retail banking sector. This could impact efforts under way in several GCC states to boost employment among citizens, such as the Saudi Nationalisation Programme and the UAE’s Emiratisation drive.

On the upside, however, AI can be very good at improving efficiencies in the oil and gas industry and the power sector, and at boosting productivity.

The need of the hour appears to be establishing a clear path towards efficient AI deployment, despite the fact that the results of the technology’s full-fledged implementation remain hard to ascertain. 

“The UAE is doing a lot to attract skilled people to provide more value-added services, but that is an organic process and needs a more vibrant ecosystem of education institutions – and companies establishing more than just sales offices – to be truly called a hub,” the infrastructure investor tells MEED. “Saudi Arabia is still a bit far from that.”

Data centres meet upbeat growth 

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Jennifer Aguinaldo

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    3 June 2026

     

    Foreign interest in Syria’s oil and gas sector is growing as the government moves to revive the industry and elevated global energy prices improve the economics of new developments.

    A series of agreements signed in recent months has attracted some of the world’s largest energy companies, raising expectations that investment and production could accelerate.

    However, despite growing optimism, significant security, financial and regulatory challenges remain, which could constrain the pace of growth for years to come.

    Military control

    Optimism among foreign businesses about potential opportunities in the country was boosted in January this year when Syria’s central government regained control of most of the country’s oil and gas assets.

    On 13 January 2026, the Syrian government launched an offensive against the Kurdish-led Syrian Democratic Forces (SDF) in the territories of the Democratic Autonomous Administration of North and East Syria.

    The offensive was initially focused on eastern Aleppo Governorate, around the towns of Deir Hafer and Maskanah, and was expanded on 17 January to include Raqqa, Deir ez-Zor and Al-Hasakah Governorates.

    The offensive eventually led to Syria’s Omar and Conoco fields being seized, as well as the Tanak, Rmeilan and Suwaydiyah fields.

    The Omar field is Syria’s largest oil field and the Conoco field hosts Syria’s largest gas processing plant, which previously supplied several power stations, including the Jandar plant in Homs, one of the country’s largest.

    Before the outbreak of the Syrian civil war in 2011, this field produced about 10 million cubic metres of natural gas a day.

    On 18 January, an agreement was signed under which Damascus assumed administrative and security control over all major oil and gas assets previously held by the SDF in the northeast of the country.

    Wider market

    The push to take control of the oil and gas assets came ahead of the US and Israel attacking Iran on 28 February, which led to a regional conflict and disrupted shipping through the Strait of Hormuz.

    Disruption in the waterway – which normally transports about 20 million barrels a day (b/d) of oil and refined products, as well as around 20% of the world’s liquefied natural gas – triggered a surge in global energy prices and sent oil companies scrambling to develop resources that did not rely on the strait as an export route.

    Syria is increasingly being viewed as a potential option for major oil and gas development projects due to its significant unrealised reserves and its geographic position across the Mediterranean from consumer markets in Europe.

    Syria’s production currently stands at around 110,000 b/d, down from a peak of 380,000 b/d in 2011, according to a report published by the US-Syria Business Council in April.

    The country’s recoverable oil reserves are estimated at 2.5 billion barrels, and Syria also has significant gas reserves.

    In April, Yousef Qiblawy, chief executive of the state-owned Syria Petroleum Company (SPC), said his organisation aimed to double national production before 2027 and boost output to 800,000 b/d by the end of 2029, not including offshore production.

    He said: “Before the takeover of the northeast, we were producing 10,000-15,000 b/d.

    “Currently, we are producing 100,000 b/d, and the plan now is to double this production number by the end of this year.”

    He also expressed optimism about the outlook for projects in Syria’s portion of the Mediterranean Sea, saying: “New offshore and onshore exploration is also starting … there are 15 or 17 brand new green blocks, untouched in Syria, with huge reservoirs of oil mainly, and some gas.”

    So far, no offshore wells have been drilled in Syrian waters.

    In 2013, Russia’s Soyuzneftegaz signed an offshore exploration agreement with Damascus, but the project was abandoned during the civil war and never progressed to drilling.

    Making deals

    In recent months, a range of significant deals and meetings has raised expectations for the future of Syria’s oil and gas sector.

    On 11 May, SPC announced plans for Syria’s first-ever offshore oil and gas exploration project.

    The deep-water project is being carried out in partnership with US-based Chevron and Qatar’s UCC Holding.

    SPC said that it had, together with Chevron and UCC Holding, defined the boundaries of the offshore block, paving the way for finalising contracts and starting technical operations this year.

    The three companies previously signed a preliminary deal in February to evaluate offshore oil and gas exploration in Syrian waters.

    On 12 May, France’s TotalEnergies, state-owned QatarEnergy and US-based ConocoPhillips signed a memorandum of understanding (MoU) with SPC relating to the exploration of Syria’s offshore Block 3.

    Under the terms of the preliminary deal, the companies will carry out a technical review of the area.

    The agreement also established a framework for technical and commercial discussions related to exploration activities on the block.

    ConocoPhillips also signed another MoU in November last year, along with Houston-headquartered Novaterra Energy, focused on developing several gas fields and launching exploration programmes.

    This MoU included an agreement to rehabilitate the gas plant at the Conoco field in Deir ez-Zor province.

    At the time, Qiblawy said the agreement was expected to boost the country’s gas production by 4-5 million cubic metres a day within a year.

    On 8 May, the Croatian oil company INA and Hungary’s MOL announced that they had held a series of meetings with SPC focused on exploring options to restart INA’s oil and gas operations in Syria.

    They said a joint technical team established by INA and SPC was assessing the feasibility of INA resuming operations on its Syrian concessions by evaluating operational, technical, commercial and regulatory conditions.

    In 2011, oil and gas production at INA’s Syrian concessions had reached 37,300 barrels of oil equivalent a day.

    By the time the company suspended operations in Syria in 2012, it had invested approximately $1.1bn in the country and had built a gas processing plant at the Hayan gas field.

    Resuming activities

    In April, the managing director of London-headquartered  met with Syria’s president, Ahmed Al-Sharaa.

    Gulfsands is the official operator of Syria’s Block 26, but for 15 years after the start of the Syrian civil war, it could not access the asset.

    The company declared force majeure in late 2011 and, until recently, it was under the control of the Kurdish-led SDF.

    In a statement released after the April meeting with Syria’s president, John Bell confirmed that his company had recently regained access to Block 26, which he described as “an important milestone for Gulfsands and for Syria”.

    He added: “This development provides a strong foundation for the recommencement of operations and investment.

    “We are now back on the ground in Syria, working closely with SPC to accelerate towards a full resumption of activities.”

    Bell also said that, as a result of a global drive to diversify away from “traditional choke points like the Strait of Hormuz”, Syria had the potential to become “a new world energy hub”.

    In April, Saudi Arabia’s ADES Holding Company signed an implementation contract with SPC to develop several gas fields in Syria.

    In a statement, SPC said the scope of the deal with ADES included executing maintenance and development works on existing wells, in addition to drilling new exploratory wells within the agreed operational areas.

    It added that it expected the deal to increase gas production by 25% within the first six months and by 50% by the end of this year.

    Industry insiders are also watching US-based HKN Energy, which has close ties to the Trump administration, after Qiblawy said in January that the company had expressed interest in entering the Syrian oil and gas sector.

    In April, a statement from the US-Syria Business Council said an MoU with HKN was “in the pipeline”.

    Over recent months, expectations have been building about a potential deal involving US-based oil and gas companies Baker Hughes, Hunt Energy and Argent LNG.

    In July last year, Jonathan Bass, chief executive of Argent LNG, said that the three companies were planning to develop a masterplan for Syria’s oil, gas and power sector.

    It was later reported, in February this year, that the three US-based companies were planning to form a consortium for oil and gas exploration and energy production in northeast Syria.

    The consortium is expected to become involved in approximately four to five exploration blocks.

    Commenting on his company’s plans in Syria, Argent LNG’s chief executive said: “We're very excited to be realising the visions of US President Donald Trump and Syrian President Ahmed Al-Sharaa, bringing the country forward from darkness to light.”

    In a separate statement in April, Hunter Hunt, chief executive and chairman of Hunt Oil Company, said: “President Sharaa’s vision is bold, it is comprehensive, and it is full of execution and getting things done … We like what we see on a forward-looking basis.”

    Challenges remain

    While SPC’s Qiblawy has outlined ambitious targets to increase oil and gas production and international interest in the sector is growing, significant obstacles remain.

    A report published by the US-Syria Business Council in April highlighted several risks facing prospective projects. Among the most significant is the threat posed by Islamic State, particularly to pipeline infrastructure crossing remote desert regions.

    The report warned that securing large stretches of sparsely populated territory remains difficult, increasing the risk of attacks on critical energy infrastructure.

    It also highlighted the possibility of renewed conflict in northeastern Syria, where the SDF previously controlled many of the country’s most important oil and gas assets. According to the report, the current ceasefire remains fragile and any deterioration in relations could reignite territorial disputes.

    Beyond security concerns, international investors continue to face substantial financial and regulatory hurdles.

    Although sanctions on Syria have been eased considerably, the country remains designated by the US as a State Sponsor of Terrorism. As a result, licences are still required for many controlled exports, including oilfield equipment, software and technology.

    Restrictions also remain on support from international financial institutions. The US Export-Import Bank and the US International Development Finance Corporation continue to face limitations on their ability to support projects in Syria, constraining access to capital for large-scale developments.

    These factors suggest that progress towards SPC’s production targets is likely to be slower than official projections imply.

    Nevertheless, if Syria can continue to improve security conditions, strengthen political stability and maintain a supportive investment environment, the country’s oil and gas sector has the potential to deliver steady production growth over the coming years.

    For international energy companies seeking opportunities outside traditional export routes and geopolitical chokepoints, Syria is increasingly emerging as a market with significant long-term potential, albeit one accompanied by substantial risk.

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    The incident is the third major drone strike on the hub in recent months. On 1 April, a drone strike hit fuel tanks managed by Kuwait Aviation Fuelling Company, sparking massive fires. On March 28, another multi-drone raid severely damaged the airport’s primary radar systems.

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