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Trump in the Gulf: There’s substance behind the hype

Was it all just for show? The investment agreements 'signed' during the trip are clearly ludicrous

May 22, 2025, 1:07 PM

Donald Trump at a business forum in Abu Dhabi during his Gulf visit. Gulf states announced deals worth huge sums with the US

The US President’s tour of the Gulf last week was an outstanding success for him and for the leaders of the three states that he visited: Saudi Arabia, the UAE and Qatar.

Trump was able to announce that the three countries will invest trillions of dollars in the US economy and buy billions of dollars of US goods, with the implication that this will create new jobs and manufacturing plants at home, and accelerate US economic growth.

At a personal level, Trump clearly enjoyed his time with the Gulf leaders, with whose personalities and leadership styles he feels a strong connection.

As for the Gulf states, they are supposed to benefit from billions of dollars of joint investments that will entail the building of new factories and technology parks, particularly in the field of artificial intelligence.

The leaders can also be confident that their requests for flashy new military kit will be approved, and that their investments in the US will be fast tracked, or at least not delayed by irritating regulatory scrutiny.

And they know that Trump and those he has placed into important positions in the US government aren’t going to be asking impertinent questions about democracy, human rights and the treatment of foreign workers.

Remember the Dubai Ports controversy nearly 20 years ago, when a Dubai-owned company tried to buy six US seaports? The emirate withdrew its bid amid a storm of controversy over supposed threats to US security. It’s hard to imagine a UAE, Saudi or Qatari company having such difficulties with a similar investment plan today.

And, whatever you think of Trump, he is the president of the US, which has the world’s biggest economy and is its greatest military power. Having him saying nice things about you plays well with domestic audiences in the Gulf.

There is no reason why the more dynamic and wealthy Gulf states cannot host cutting-edge industries and attract serious entrepreneurs

But was it all just for show? Beyond the bromances between Trump and the Gulf leaders, is there any economic substance to this?

The investment agreements “signed” during the trip are clearly ludicrous. Take Qatar, for example: its pledged economic exchanges worth $1.2 trillion amount to five times the country’s current GDP.

The claim that its sovereign wealth fund will invest more than $500 billion in the US over the next decade stretches credibility, given that the fund’s total portfolio – accumulated over several decades – is estimated at around $526 billion.

But if only a small part of the proposed economic exchanges are realised in the years ahead, the impact on the Gulf economies could be significant.

There are plans to build economic zones in the kingdom dedicated to AI, and Saudi Arabia’s Humain has formed a partnership with Nvidia to build AI factories.

Abu Dhabi is also planning to develop AI infrastructure, and its national oil company Adnoc is teaming up with US investors to develop the Emirate’s energy industry.

I’m too young to remember, but I’m sure there were plenty of cynical voices when Saudi Arabia announced its plans to create petrochemical cities at Jubail and Yanbu in the 1970s, yet both were built and have proved hugely successful.

I am old enough to have scoffed at Dubai’s ambitions to develop golf courses and a tourism industry – how wrong I was!

There is no reason why the more dynamic and wealthy Gulf states cannot host cutting-edge industries and attract serious entrepreneurs and world-leading scientists and technicians.

The Gulf leaders do themselves a disservice with their constant hyperbole: the ridiculous dollar figures and the inevitable claims that any new venture, whatever it is, will be the biggest of its kind anywhere in the world.

But look beyond the hype and what do we see?

With small incremental steps, the economies and social fabric of many GCC states have completely changed over the past decades. The Saudi economy may still be dependent on selling oil and gas (and, just to be clear, it is) but budgetary revenues from non-oil and gas sources have quadrupled over the past 10 years and now account for at least a third of total revenue.

Dubai has moved beyond its dependence on oil and re-exports. Qatar was able to host a successful month-long world cup football tournament in 2022.

An enduring challenge for the Gulf states lies in their ability to transfer the skills of overseas investors into their own societies.

Saudi Aramco did this successfully many years ago, transforming an American company into one which is now led by Saudi managers and technicians.

If Nvidia does indeed create AI factories in the kingdom as a result of the deals struck during Trump’s visit last week, will we see Saudi computer scientists running them, and taking them overseas in the years ahead?

I think we will.

Andrew Cunningham writes and consults on risk and governance in Middle East and sharia-compliant banking systems