A high-tech boom in the Gulf Cooperation Council nations has led to growing geopolitical divergence with the United States, but also new opportunities for the relationship.

For the past half-century—from the 1973 oil boom until the early 2020s—America’s interactions with the nations of the Persian Gulf followed a simple and unchanging formula. According to the formula, the continued flow of oil through the Strait of Hormuz and other regional chokepoints was a national security priority for the United States, requiring the establishment of military bases at strategic locations throughout the region. In addition to its own forces, Washington worked to build up local militaries, selling billions of dollars in weapons, training, and related services to the wealthy and security-conscious Gulf Cooperation Council (GCC) monarchies.

This enduring arrangement was beneficial to both sides, brought a measure of stability to the region, and was mostly sufficient to explain America’s relationship with the Gulf until the present. Even today, the formula has not become entirely wrong. But as the geopolitical trends of the world have shifted and America’s interests in the Gulf have evolved, it has become so incomplete that those who cling to it risk missing the fundamental transformation that has unfolded in recent years.

To be clear, oil and gas have not lost their importance to the United States or the global economy. As the ongoing war has made clear, the Strait of Hormuz has not become strategically marginal, and energy security will remain a core element of American strategic calculations well into the future. Yet the Gulf Washington knew in the last century is not the Gulf now taking shape today. The question that should concern Washington, therefore, is no longer simply how to protect Gulf oil, but who will partner with the Gulf in building a post-oil economy. This is not merely an economic question; it concerns the balance of international power in the Middle East, and those who help shape the new economic architecture will help shape the distribution of influence in the next phase.

The GCC Is Becoming a High-Tech Hub—and Diverging from America

In the past, the Gulf’s maritime importance was read primarily through the Strait of Hormuz and the movement of oil tankers. Today, the picture is far more complex. The region is home to major ports, trade corridors, logistics networks, subsea cables, data centers, airline hubs, industrial zones, and connectivity projects linking Asia, Europe, and Africa. The Gulf is seeking not merely to remain an energy-production hub, but to become a central node in the global economy.

Saudi Arabia, the United Arab Emirates (UAE), Qatar, and Kuwait are no longer pursuing economic diversification solely as a means of reducing reliance on hydrocarbons. They are moving into sectors likely to define the global economy in the decades ahead: artificial intelligence, cloud computing, data centers, advanced manufacturing, renewable energy, logistics, and financial technology. These investments are paid for by Gulf sovereign wealth funds, which increasingly function as instruments of economic and geopolitical influence. Historically drawn from the Gulf’s incredible hydrocarbon wealth, these funds today command hundreds of billions of dollars in deployable capital across a wide variety of advanced technology sectors—at precisely the same moment when the world’s major economies require vast investment in semiconductors, data centers, energy, defense, and infrastructure.

It is a mistake to view the race for artificial intelligence merely as a competition to develop better software. AI development requires efficient algorithms, but it also requires the resources needed for computing power: semiconductors, data centers, enormous amounts of electricity, capital, markets, cables, other associated infrastructure, and reliable supply chains in each of these areas. The GCC states are ideally placed to stay on the cutting edge of these developments; they have the energy resources, financial capital, geographic location, and capacity to swiftly make large-scale investment decisions. It is no surprise that major technology companies and governments increasingly regard the Gulf region as part of the future infrastructure of the digital economy.

Yet this opportunity poses a clear dilemma for the United States. Washington wants the GCC to remain within the US technological ecosystem—to use American chips, platforms, technologies, and standards, and to exclude rival Chinese ones. The GCC states, meanwhile, wish to pursue whatever arrangements are best for themselves; they have sought American technology, Chinese markets, Asian infrastructure, and European partnerships, while simultaneously building up their own national capabilities in each area. Put differently, they are not looking for a new ally to replace an old one, but greater room for strategic maneuver.

This objective places the GCC increasingly at odds with the United States. For decades, the US-Gulf relationship rested on an implicit bargain: the United States would provide security, and its Gulf partners would offer strategic alignment in return. But this arrangement no longer operates as smoothly as it once did. Gulf states have become wealthier, more connected to the global economy, more capable of diversifying their partnerships, and more determined to reduce their dependence on any single power. Moreover, they have learned through repeated crises that excessive dependence on one outside player can become a vulnerability. Accordingly, Gulf strategy is predicated on developing multiple partnerships. In Gulf calculations, Washington, Beijing, New Delhi, Brussels, London, and Tokyo are not necessarily alternatives to one another. Each can serve as a partner in different fields and to different degrees. This is the central point of contention: the United States seeks continuing alignment, while the Gulf seeks greater flexibility in its partnerships.

China’s Subtle Approach to Gulf Influence

This is where the contrast between American and Chinese approaches to the Gulf becomes more apparent. Washington still tends to view the region primarily through a security lens, with economics and technology following afterward. By contrast, Beijing sees it as an integrated system encompassing energy, ports, communications, trade, investment, technology, and artificial intelligence. Chinese leaders long ago concluded that they did not need to deploy aircraft carriers to the Gulf or replace US forces in the region to gain influence there. Instead, they could gain many of the same benefits through commercial partnerships in critical sectors—without the massive upkeep costs and geopolitical risks that the United States confronts in the region every year.

On the one hand, this development could be interpreted as reassuring for the United States. At the end of the day, US forces in the Gulf region are the ultimate backstop for its protection; China’s inability or unwillingness to deter Iran from striking at the GCC during the ongoing Iran war has clarified in many regional capitals that Beijing is merely a trading partner, not a true ally. Yet it would be a mistake to assume that this approach is a sign of Chinese weakness. Power in the emerging international system is measured not only by the number of military bases a country possesses, but also by the economic and technological networks it offers that others cannot operate without.

The United States will almost certainly continue to be the GCC’s dominant external military power, but will not necessarily remain its most influential economic and technological partner. The gap between those two forms of power will shape the nature of influence in the decades to come.

GCC Financial Capital Will Define the Gulf’s Future

Washington must also reconsider how it views sovereign wealth funds. These funds are no longer merely investors seeking financial returns. Their investments in technology firms, semiconductors, energy, artificial intelligence, and infrastructure directly influence which industries grow, which markets expand, and which technological ecosystems become stronger. Gulf capital has in effect become part of the global geopolitical competition to harness the technologies of the future. These funds are far more than another anodyne source of “foreign investment”; in the 21st century, the movement of capital will be no less consequential than the movement of fleets. Those able to deploy financing at the right time, in the right sector, and in the right environment can influence international balances of power, and the GCC states are well-positioned to capitalize on this new lever of influence.

Another dimension is critical minerals. The green economy, electric vehicles, semiconductors, advanced weapons systems, and data centers all depend on minerals and processing networks that have themselves become arenas of competition among major powers. The Gulf states are not major producers of most of these minerals, but they possess three assets that could nevertheless make them consequential players: dominance of energy supply chains, control of geographically vital port facilities, and, as noted, an immense pool of capital from which to make strategic investments in critical minerals development. The GCC states can pour resources into mines beyond the region, participate in processing and refining, finance new infrastructure, and link sources of production to global markets. 

Can America and the GCC Still Work Together?

The United States and the GCC are longtime strategic partners, and the recent strategic divergence between them does not mean they cannot continue to work together productively. The key is understanding the GCC’s self-interest. The Gulf bloc cannot be treated as a handful of small tributary states, as the United States (and before it the United Kingdom) was at one time predisposed to viewing it. It is a geopolitical player in its own right, and attempting to coerce it into following Washington’s orders through force is bound to end in failure.

If the United States can instead frame the relationship as a partnership of relative equals, it has much to gain from working alongside the GCC in high-tech and critical minerals development. The Gulf’s vital geostrategic location makes it extremely relevant to any serious Western effort to reduce dependence on China in critical supply chains. Far more than a mere consumer or supplier of energy, it has become capable of playing an active role in reshaping global economic flows.

The US-Gulf relationship was born of oil, but oil alone will not decide its future. The Gulf of the 21st century seeks to export capital, host data centers, finance technology, serve as a hub for transportation and trade, and help build the global digital economy. The region’s future competition will be over who helps the Gulf prepare for what comes after oil. America is well-positioned to play a leading role in that competition, if it chooses to do so.

About the Author: Khalid Al-Jaber

Dr. Khalid Al-Jaber serves as the executive director of the Middle East Council on Global Affairs in Doha. A leading researcher and academic, he is widely recognized for his expertise in international relations, political communication, and the dynamics of the Middle East and North Africa (MENA) region.

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