The United Arab Emirates quit the world’s most powerful oil cartel on May 1, freeing billions in oil revenue while placing its biggest bet yet on artificial intelligence.
The Organization of the Petroleum Exporting Countries had capped UAE oil production at 3.2 million barrels a day for a country that can pump 4.8 million. That gap is worth more than $61 billion a year at current Brent prices. Within two days of exiting the cartel, ADNOC, the state oil company, announced $55 billion in accelerated spending on oil production, refining, and petrochemical operations.
The extra revenue would give the government more capital to deploy through its AI and energy investment funds, Babak Hafezi, CEO of HafeziCapital, a firm that advises Gulf governments on investment strategy, told Rest of World.
“Gulf capital is structurally becoming infrastructure capital for the AI economy, not purely financial capital,” Hafezi said.
The U.S. artificial intelligence industry is deeply embedded in the UAE. Microsoft is building data centers there, and Emirati tech conglomerate G42 is constructing a five-gigawatt campus for OpenAI. ADNOC is buying into U.S. gas infrastructure, citing growing electricity demand from data centers as a key driver.
The AI race
The demand for AI infrastructure is outpacing the supply of energy and capital, Hafezi said.
The UAE is emerging as one of the few nations with the wealth, energy, and partnerships to finance data centers at home while investing in U.S. gas infrastructure to generate electricity for data centers there.
Gulf capital is structurally becoming infrastructure capital for the AI economy.”
“The binding constraints in AI are no longer only chips or large language models,” Hafezi said. “It is the infrastructure stack, power, land, cooling, transmission, data centers, and long-term patient capital.”
MGX, an Emirati state-backed AI fund, is spending up to $10 billion a year on AI deals and has co-invested in OpenAI and Anthropic, while ADNOC subsidiary XRG is looking for overseas energy acquisitions.
G42, backed by the country’s sovereign wealth fund, is building the Stargate UAE campus for OpenAI, which will draw enough electricity to power several million homes. The first cluster is expected to go live this year.
Microsoft committed $15.2 billion in November 2025 to build data centers in the UAE through Khazna, a G42 subsidiary that controls more than 70% of the country’s data center capacity and has emerged as the backbone of its digital infrastructure. G42 is also investing in OpenAI data centers in the U.S. through a partnership with Microsoft.
ADNOC, XRG, and G42 did not respond to requests for comment.
Gas powers AI
With the UAE now able to produce more oil and natural gas than before, it would expand the supply available to generate electricity for data centers.
“Oil production produces associated natural gas, so if the UAE increases oil production, its natural gas production will also increase,” Ellen Wald, an OPEC and Gulf energy policy specialist at the Atlantic Council’s Global Energy Center, told Rest of World. “That could be useful for data centers.”
The same logic is playing out in the U.S. XRG is evaluating 29 deals, including gas production, pipelines, processing, and export terminals, because American data centers need growing volumes of gas-fired electricity. XRG already holds stakes in a major natural gas export terminal in Texas, and expanded that position in January this year with a 20-year fuel supply agreement.
“The U.S. is a market where we want to be bold,” XRG’s chief investment officer, Nameer Siddiqui, told the Financial Times in late April.
AI-focused data centers in the U.S. consumed 4.4% of the country’s electricity in 2023, and are projected to reach up to 12% by 2028, according to the Department of Energy. Gas produced on U.S. soil through XRG-owned infrastructure will help meet that demand.
AI infrastructure is one of several destinations for the extra energy, alongside global gas exports, Wald said. The UAE has received U.S. clearance for exports of advanced Nvidia processors used to train and run AI systems, making it the only country in the region with that level of access.
Whether the global AI economy can absorb the trillions of dollars being poured into it remains an open question, Hafezi said. The gap between what is being spent on AI today and what it will return tomorrow is far from settled.
Despite that uncertainty, the UAE is assembling a combination of energy, capital, and geography that few countries can replicate, Hafezi said. Where the U.S. leads on chips and software, and China leads on manufacturing, the UAE brings the fuel and the funding.
“Sovereign power came from controlling hydrocarbons, but in the 21st century, it will be from increasingly controlling compute, energy access and availability, and capital formation,” he said. “The UAE’s strategy is to bridge all the above and secure a seat at the table.”