IT Strategy

How the Middle East became a hotspot for tech founders in Silicon Valley

“Everyone’s got a stake” in the Middle East’s AI and tech sector, defense tech company Shield AI exec tells IT Brew.
article cover

Svetazi/Getty Images

· 3 min read

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.

The Middle East is becoming a new hotspot for Silicon Valley, as tech founders and investors swing by the region to close deals, the Washington Post reported.

“Everyone’s got a stake” in the Middle East’s AI and tech sector, Bob Harward, EVP for international business and strategy at Shield AI—a defense technology company—told IT Brew. “And those who are committed to it, to put [in] the resources—and I’m not just talking financial resources, I’m talking manpower, womanpower, and intellectual rigor and capacity in this—will have an advantage,” he said. “I think this is one of those areas where partnerships are so important. Who are your partners and who are your allies? So, you work together to enhance that capacity.”

Show me the money. Venture capital firm Andreessen Horowitz—which has invested in Facebook, Instagram, GitHub, Okta, and Slack, to name a few—“is in talks to raise $40 billion from Saudi Arabia for a dedicated AI fund,” according to the Post. In April, Microsoft announced an investment in AI firm G42, “which also has an agreement to use AI language models from Sam Altman’s OpenAI,” the outlet said.

But before Microsoft’s $1.5 billion investment came a promise that the firm would cut ties with China; it told the Biden administration that it would not only divest from Chinese companies but also “remove Chinese technology from its data centers and would work to prevent advanced capabilities from leaking to China,” according to the Post.

China has taken a “pragmatic” approach to AI and other tech, Nina Xiang, author of Red AI: Victories and Warnings From China’s Rise In Artificial Intelligence, told IT Brew. The nation views “technology as a tool only, to either strengthen, solidify their authority, or the government’s rule—or to increase efficiencies of various sectors.”

And the Middle East, she says, has “its own agenda…I think you just have to remember that’s their priority No. 1, and how they play the US–China rivalry is whichever way that’s going to get them there, to their No. 1 goal.”

Back to the future. The AI scene in the Middle East involves both “commercial lanes and defense lanes,” Harward said. “You’ve seen them both on a very rapid pace of development and, specifically, in both those lanes, analytics, intel, information, data, all those things move very quickly,” he said.

Based in the United Arab Emirates, he projects that the UAE, due to its lavish resources, “proactive approach,” and strategic partnerships, “will be the first country to really see operational AI in the commercial lanes,” noting that the UAE is highly focused on electric vertical take-off and landing aircraft (eVTOLs).

IT Brew reached out to G42, Microsoft, and Andreessen Horowitz for comment. Microsoft directed IT Brew to a blog and two press releases about its investment and collaborative efforts with G42. G42 said it didn’t have anything further to share at this time. Andreessen Horowitz did not immediately respond to a request for comment.

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.