The US And China Are Negotiating AI’s Future – Is The Middle East’s Neutral Position Still Tenable?

A diplomatic moment is taking shape at the intersection of geopolitics and technology.

According to reporting from multiple outlets, the US and China are in preliminary discussions about establishing recurring bilateral talks focused specifically on AI security risks, with US Treasury Secretary Scott Bessent leading the American side. The conversations are centred on frontier model safety, autonomous systems and the risk that powerful AI causes a crisis that neither superpower is positioned to manage. A Trump-Xi summit in Beijing on 14–15 May 2026 is expected to formalise the next steps.

For most of the world, this is background geopolitics – for the Middle East, it’s a direct question about the viability of a strategy the region has been executing for the past two years. Gulf sovereign wealth funds are, at this moment, simultaneously in discussions to invest up to $50 billion in OpenAI via UAE funds including MGX, seeking exposure to Anthropic through UAE and Qatari capital, and running Chinese AI companies including DeepSeek through Aramco Digital data centres.

According to research cited by the American Security Project, MENA funds have also seen strong returns from Chinese AI listings including MiniMax and Zhipu. The position the Gulf has built is one of intentional, simultaneous engagement with both sides, that position is now being actively stress-tested.

Inside The Diplomatic Room Where AI Rules Get Written

The US-China AI discussions are focused on risk management rather than regulation. The immediate concern, according to analysts cited in coverage from multiple outlets, is that neither government has established channels to manage a crisis triggered by an AI system behaving unexpectedly at scale. The goal is to build the diplomatic infrastructure to handle a worst-case scenario – not to restrict development or align technical standards.

That distinction holds weight for the Gulf. A risk management framework between Washington and Beijing doesn’t immediately force a choice between AI systems. But the longer-term trajectory of formal bilateral AI governance – if these preliminary talks develop into something more substantive – raises harder questions. As AI governance frameworks mature, the question stops being about model access and starts becoming about governance alignment: whose standards define acceptable AI behaviour, whose infrastructure controls critical decision flows, and where accountability sits when AI systems are embedded in finance, healthcare or public administration.

The Layer That Makes Or Breaks Gulf AI Neutrality

Ahmad Shadid, Founder of O Foundation, which operates at the intersection of confidential compute and AI infrastructure using Nvidia H100 chips, puts the structural tension more bluntly. “The Middle East’s neutrality is real, but it’s built on access to US chip infrastructure,” he says. “If bilateral AI governance frameworks begin to encode restrictions at the hardware level, that neutrality doesn’t hold. The region isn’t caught between two ecosystems – it’s downstream of one.”

The US export control regime around H100s is already a live fault line. The G42-Microsoft partnership, which secured the UAE priority access to Nvidia Blackwell chips, required divesting from Chinese hardware as a condition. That trade-off has been made once. Whether it can be avoided as governance frameworks tighten is what Gulf AI builders are watching most carefully.

Neutrality As Strategy, Not Fence-Sitting

Raphaël Peyret, who advises founders and leadership teams across the Gulf on AI strategy and is based in the region, pushes back on the perspective that the Middle East is in a precarious position. “Calling it neutrality misses what’s actually happening,” he says. “The Middle East is not sitting on the fence. It’s deliberately partnering with everyone, and that’s a sovereignty strategy, not a diplomatic one.”

His analogy is instructive – the UAE purchased air defence systems from multiple sources and stress-tested that approach under real conditions. AI infrastructure, he argues, follows the same logic. “At the startup level, it’s even simpler,” he adds. “Founders here use whatever is cheapest and most performant. There’s no ideological weight attached to the choice. US chips dominate because performance demands it. US models lead on the frontier. But Chinese open-weight models are increasingly competitive and significantly cheaper, and people are using them.”

On formal governance, Peyret is sceptical that it changes the practical picture as quickly as the geopolitical commentary implies. “Data residency laws are already the real constraint here,” he says. “As long as models are made available outside their origin countries – which is extremely likely – the governance question matters far less than it looks from the outside.”

What Changes If The Talks Become Policy

The Gulf’s position is strongest if bilateral talks remain focused on crisis management — which, for now, they are. A move toward formal governance alignment would raise harder questions, and while that’s not the direction these conversations are currently heading, it remains a plausible next step.

According to research from McKinsey and Technology Global, projected tech spending across MENA could reach $169 billion in 2026 for AI infrastructure alone. That buildout is predicated on continued access to hardware, capital and model infrastructure from both the US and, to a growing degree, Chinese open-weight models. A formal governance split between the two systems would not immediately disrupt that, but it would change the risk calculation for every Gulf institution currently running parallel exposure to both sides.

For now, the Gulf’s dual strategy holds. The conversation in boardrooms and policy offices across the region is increasingly about how to shape the rules of the road rather than simply respond to them.