There’s a new cold war and the GCC is in its crossfires

Faisal Bashir / SOPA Images via Reuters Connect

The cold war of the last century between the US and former Soviet Union focused on an arms race centred on nuclear prowess, later becoming a space race.

Today however, a new cold war has emerged — this time between the US and China, fighting for technological supremacy.

The launch of DeepSeek last month demonstrated how fierce the competition between the two has become. Artificial intelligence is the latest battleground for the two nations as they seek to assert dominance on the world stage. 

For the Middle East and in particular the GCC, US influence over the past few decades has dictated a preference for American technology. But a strengthening in trade relations with China has seen a plethora of Chinese technologies take hold in the region.

Trump’s protectionist mindset and MAGA attitude are unlikely to look favourably on countries which choose Chinese over American technology. During his first administration, he placed Chinese telecoms giant Huawei on an “entity list”, preventing it from purchasing US goods and services.

He also pressured the UK to ban Huawei’s 5G technology. The UK complied and its government stipulated that all such equipment must be fully removed from its networks by 2027. 

Such a position can only work if the US has superior innovation – but its lead is precarious, as became evident with the launch of DeepSeek. Few expected China to be able to produce something like DeepSeek, especially with the limited computing power used.

Its detractors say that it is a mere imitation of ChatGPT, that it limits free speech, and that its is likely to be accessible by the Chinese government. 

But while the US was busy spending trillions of dollars fighting wars in Afghanistan and Iraq, China was innovating and building up its manufacturing and tech capabilities.

The Middle East does not have generative AI tools on a par with the likes of ChatGPT or DeepSeek

Its research and development (R&D) spend in 2010 was just $130 billion. Today, it is the world’s second largest such spender, with close to $500 billion invested in 2024. 

China also spent the past decade wooing the Middle East region through its Belt and Road Initiative first outlined in 2013. This aims to build roads, ports, railways and other infrastructure, including digital connectivity, from China across to North Africa, with up to $1 trillion of Chinese investment.

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The country has strengthened its tech presence in the region, building out telecoms networks, data centres and cloud computing technology. 

As the world’s principal energy supplier, the Middle East’s political stability and ideological preferences play a crucial role in the global economy.

Given its strategic location and resource-rich lands, the region has been a theatre for global conflict with empires and superpowers attempting to either invade it or woo it for political, ideological and economic support.

Abu Dhabi, probably the most ambitious and advanced tech player, has developed Falcon and Jais, its own series of large language models. Saudi Arabia has built Allam.

But the Middle East does not have generative AI tools on a par with the likes of ChatGPT or DeepSeek, which create content including text, audio and images. For now the region has to rely on these products to be technologically competitive.

This author asked a small sample of people on LinkedIn if they were using DeepSeek. A third of the respondents, among them startup founders, CEOs and marketing managers, said that it had become their main AI tool.

However, 40 percent said that they were no longer using it, raising concerns over data privacy and a lack of overall trust in Chinese technology. For the majority of people and businesses, cost will play an important role in deciding what tools to use. Right now DeepSeek is almost 30 times cheaper than ChatGPT.

The ideal scenario is what we currently have – the ability to pick and choose technology from all over the world, without having to rely on one single source. But that will depend on Trump and his entity list.

If technology becomes more fragmented, governments around the world will eventually have to pick a side.

The Middle East will have to choose the technology it wants to deploy for its future so that it doesn’t risk losing out on yet another industrial revolution. This choice, if it comes to it, will be driven by either cost or ideology. 

Triska Hamid is a writer focusing on technology and startups in the Middle East and an angel investor