Can Gulf States Secure the Global AI Supply Chain?

The official entry of Qatar and the United Arab Emirates (UAE) into the US-led Pax Silica supply chain agreement marks a significant shift in the geopolitical landscape of the Middle East.

The emerging partnership could signal a transformation from an economy built on oil and gas to one centred on silicon and software.

Pax Silica, commonly referred to as the "Silicon Declaration," is a strategic framework spearheaded by the Trump administration. The initiative aims to strengthen global supply chains for semiconductors and AI. 

Qatar formally joined the agreement on 12 January 2026, whilst the UAE is set to sign on 15 January. These Gulf nations join a "coalition of capabilities" that includes the United Kingdom, the United States, Australia, Israel, Japan, Singapore and South Korea.

The agreement's name deliberately evokes the Pax Romana, the period of stability under Roman imperial rule, whilst referencing silica, the refined element fundamental to computer chip production.

Jacob Helberg, US Under-Secretary of State for Economic Affairs, explains: "If the 20th century ran on oil and steel, the 21st century is going to run on compute and minerals."

For Gulf states, participation could represent a fundamental recalibration of their economic and national security frameworks. Jacob characterises the development as a move towards "silicon statecraft," in which sovereign wealth and energy assets are deployed to secure positioning within the emerging digital economy.

Addressing critical infrastructure bottlenecks

Pax Silica centres on resolving three essential vulnerabilities in the technology supply chain.

First, it addresses critical minerals. China controls approximately 90% of global rare earth processing. The pact seeks to establish an alternative, Western-aligned supply chain for materials required for advanced chip manufacturing.

Second, the initiative focuses on compute capacity and power supply. AI data centres require substantial energy resources, with consumption projected to triple by 2030.

Both the UAE and Qatar possess significant electricity generation capacity, which could support the large-scale "compute farms" needed to develop next-generation AI models.

Third, the agreement involves considerable capital deployment. The Qatar Investment Authority oversees assets worth approximately US$524bn, whilst UAE sovereign funds manage more than US$1tn.

These financial vehicles are already being channelled into ventures such as "Stargate," the US$500bn data centre project involving OpenAI and SoftBank, alongside a US$100bn collaboration between Abu Dhabi's MGX, BlackRock and Microsoft.

Physical connectivity and strategic competition

Beyond technological development, the pact emphasises physical transportation of goods. A central element involves upgrading the India-Middle East-Europe Corridor (IMEC).

Through the integration of US technology into ports, rail networks and undersea cable systems linking India to Europe via the Gulf, the agreement aims to establish a protected trade route.

Pax Silica could provide an economic framework for deeper interdependence between Israel and its Gulf counterparts. By concentrating on shared technological objectives, such as the "Fort Foundry One" industrial park in Israel or the 5 GW AI facility in Abu Dhabi, the alliance potentially creates a foundation for regional stability.

The broader objective appears to be establishing technological advantage over competitors, particularly China.

Jacob says: "Our strategy is to create a competitive edge so steep, so insurmountable that no adversary or competitor can scale it."

Membership does not require complete disengagement from Beijing, though it involves certain conditions. This has been observed in the UAE, where G42 was obliged to divest its Chinese interests to finalise a partnership with Microsoft.

While Pax Silica functions as a statement of "first principles" without formal enforcement structures, the scale of capital being allocated suggests a meaningful realignment could be underway. The global competition for AI dominance now appears to traverse the ports and data centres of Doha and Abu Dhabi as well.