What has changed in the Middle East as a result of the Trump administration coming to power? One of the most important changes is the focus on strengthening the American economy through imposting of tariffs on imported manufactured and other goods. However, this policy has harmed rather than improved the American economy. Less discussed are the many important economic decisions which have directly or indirectly enriched President Trump, members so his family and close allies such as New York real estate developer, Steve Witkoff.
One issue which could strengthen the economy is the development of Artificial Intelligence (AI). However, to build the data centers required to develop AI requires large investments in the billions of dollars. One area of the world where such large sums of money exist is in the Arab world, particularly in Saudi Arabia and the Arab Gulf states, Qatar, the United Arab Emirates and Kuwait.
As the Trump administration has drawn closer to large AI firms, such as Sam Altman's OpenAI, Meta, Oracle, xAI, Softbank and Cerebras, it has used these connections to improve its ties to wealthy donors. On the Arab side of this relationship, the UAE and Saudi Arabia seek to become AI powerhouses. Saudi AI firm Humain is pouring billions into data centers. Will it pay off?
A key incentives behind this effort is the prediction that global demand for petroleum will reach its apex in 2030. Oil will no longer have the economic and political clout as the 21st century proceeds. While Saudi Arabia pours $billions into building its own AI data centers, Sam Altman has promised to build a set of the world's largest data centers in Abu Dhabi. OpenAI Says It Will Build Massive Data Centers in the U.A.E.
Dovetailing with these developments is the establishment of new Trump enterprises such as World Liberty Financial, a cryptocurrency firm. Recently, Shaykh Tahnoun bin Zayed Nahyan, an expert in AI and the UAE's National Security Adviser, agreed to contribute $2 billion to World Liberty Financial, a company run by Trump and his close friend and Middle Easy envoy, Steve Witkoff. World Liberty Financial: Where DeFi meets TradFi
In exchange, the UAE will receive advanced computer chips from the United States. American tech entrepreneurs such as Sam Altman, who received an honorary doctorate from the UAE this month, are viewed as key to helping the UAE become the world's most prominent AI state. Following the Willie Sutton mantra, OpenAI is one such firm investing in the UAE because, with its huge sovereign wealth fund, "that's where the money is."
Altman's UAE data centers will require enough electricity - five gigawatts - which is enough to power 3.75 million American homes, almost the entire population of Connecticut. Abu Dhabi's OpenAI data centers cover 10 square miles and will contain 500,000 NVIDIA H200 GPUs, more than the entire computational power than most countries possess. Anatomy of Two Giant Deals: The U.A.E. Got Chips. The Trump Team Got Crypto Riches.
The problems with these transactions are two-fold. First the United State Constitution is explicit about the president being prohibited from enriching him or herself through holding the country's most powerful position of authority: Article I, Section 9, Clause 8, states: No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.
Second, the advanced computer chips promised to the UAE could compromise the United States' national security. The UAE maintains close trade, technological and military relations with China. In July 2024, the UAE carried out joint military operations in China and purchased 22 attack aircraft from the People's Republic. The UAE is China's second if not its largest trading partner in the Arab world and has received help in developing its AI industry from Beijing China, UAE hold air force drills in Xinjiang as defense relations grow
Could giving the UAE advanced computer chips help China in its competition with the United States as each seeks to become the world's dominant AI power? Unlike the Biden administration, which constantly warned the UAE about its close ties to Beijing, the Trump administration has made little effort to make sure that critical technology doesn't fall into the hands of the Chinese state.
How does a Palestinian state fit into this picture? Trump seems increasingly to view Benjamin Netanyahu and his far-right ultra-nationalist regime as "losers" (to use one of his favorite terms). With Israel under Netanyahu now extremely isolated on the global stage and cut off from certain weapons supplies from European allies, specifically the UK, France, Germany, Spain and Portugal, not to speak of accusations that Netanyahu is a war criminal who has committed genocide in Gaza, Trump's ties with Netanyahu are becoming a liability. Little for him to gain, much for him to lose.
From Saudi Arabia and the Arab Gulf states' perspective, there is little enthusiasm for establishing an independent Palestinian state. They remember the support Palestinians living and working in Kuwait gave Saddam Husayn when he invaded the country in August 1990, prior to the 1991 Gulf War. A new Palestinian state would not be supportive of monarchical rule.
Nevertheless, Saudi ruler Muhammad bin Salman and his fellow Arab Gulf states realize that they cannot develop close financial and diplomatic ties to Israel as long as it continues to kill thousands of innocent civilians in Gaza and destroy its infrastructure. The daily list of horrors occurring in Gaza are spread by social media, creating anger not just in Arab countries, but throughout the world. Any overt ties with Israel would only further inflame the "Arab street" and the many Muslim and Global South countries with which Saudi Arabia and the Arab Gulf states maintain close ties.
Even though. Iran and its so-called "Axis of Resistance" have been dealt a serious military and political blow, the establishment of a Palestinian state would take most of the wind out of Iran and its proxies' sails. On the positive side, a new Palestinian state, even a rump entity, would decrease the threat Iran poses to the Saudi and Arab Gulf monarchies.
As long as the Gaza War continues, Trump is obliged to maintain arms supplies to Israel. To cut them off would anger his evangelical Christian base which strongly supports Israel for "Messianic" reasons. But allowing Netanyahu and his far-right cabinet. ministers to demolish Gaza and to keep killing what is now more than 66,000 Gazans, mainly women and children will serve to also isolate the United States in the global community.
Democrats and independents are increasingly calling for ending arms supplies to Israel. Continuing arms supplies could help Democrats improve their electoral results in the 2026 mid-term elections. The issue already helped Zohran Mamdani win the Democratic Party mayoral primary this past June in New York City, where even many younger Jews voted for him.
Israel has been slowly annexing the occupied West Bank by seizing Palestinian land and building illegal settlements on this land. Recently, Netanyahu's far-right Finance Minister Bezalel Smotrich called for the West Bank to be annexed and Netanyahu himself threatened to build a new settlement every time a Western country recognizes a Palestinian state.
Nevertheless, it is significant that Trump has declared he will not allow Israel to annex the West Bank. His declaration is a sign of how much he wants to avoid alienating Saudi Arabia and the Arab Gulf states who he sees playing such a central role in his future financial goals. No "Trump Towers" will arise in Dubai, Abu Dhabi or Riyadh as long as the violent destruction of Gaza's residents and infrastructure continues.
Of course, ending the Gaza War and curtailing the Netanyahu regime's goal of expelling the Palestinians and reoccupying Gaza, could help promote Trump's desire to receive the Nobel Peace Prize. If he did receive the prize, then he would replicate the achievement of Barack Obama, who remains one of his main rivals.
There are two "wild cards" in these developments. One is whether Netanyahu's government will be able to remain in power if far-right ministers like Smotrich and National Security Minister Itamar Ben-Gvir withdraw their support. The second is whether HAMAS will accept the US peace plan or decide to fight to the last man. If HAMAS remains adamant about fighting on, the horrors of the Gaza War will continue.
A final scenario could be the entry of an Arab military force into the Gaza Strip if HAMAS refuses to surrender its weapons. According to Trump's peace plan, such a force would take the place of the Israeli army if HAMAS agrees to it. However, if HAMAS decides to fight on, such a force could, with US support, enter the Gaza Strip to disarm it. Certainly, Gazans would be more willing to help Arab troops disarm what is now a weak organization with very low support in Gaza.
Egypt has a strong incentive to see HAMAS defeated and the Trump plan work. The al-Sisi regime is terrified at the prospect of large numbers of the 2 million Gazan Palestinians forced into the Sinai Desert by Israel because the refugees would then become Egypt's responsibility.
At the end of the day, Trump's foreign policy is transactional, namely viewed through eyes of a businessman, not an ideologue. Trump may be inclined to support Israel, yet focus more on ingratiating himself and his administration with nation-states like Saudi Arabia and the Arab Gulf monarchies which have huge sovereign wealth funds.
For Trump, Netanyahu and his far-right coalition increasingly look like "losers," while Saudi Arabia and the Arab Gulf state look like "winners." If creating a Palestinian state is the path forward for Trump, his family and allies to enrich themselves by riding the AI train, then sacrificing Benjamin Netanyahu and his ultra-nationalist clique may be a price the latter will have to pay.
