How would an AI development slowdown affect MENA+?

Would the proposed AI slowdown that’s pitting Silicon Valley against Washington hurt the Gulf’s AI ambitions? Depends on who you ask.

Some analysts see real danger. This argument basically holds that Gulf AI development is inextricably linked to the health of the US AI labs including OpenAI and Anthropic — which has been growing faster than basically any industry in history up until now. If it contracts, the Gulf will feel it, they say. TL;DR: When the US AI industry gets a cold, the Gulf gets pneumonia.

“The AI growth boom is intrinsically tied now to economic horizons for Gulf states,” Nick Shafer (LinkedIn), an emerging markets strategist focused on MENA and technology and an adjunct professor at the University of California-Berkeley, tells EnterpriseAM. “That means that whatever happens in San Francisco will ripple into the growth models for these countries.”

Then there’s the rosier view — essentially that the Gulf AI economy right now is mostly about building infrastructure — and that the demand for AI infrastructure in the region won’t dip just because model improvements aren’t super jaw-dropping for a while.

Pay attention to the infrastructure: “My takeaway for the Gulf / MENA [is that] the AI models themselves are important, but pay attention to the infrastructure buildouts,” Vincent Carchidi (LinkedIn), a defense industry analyst at Forecast International, tells EnterpriseAM.

What kind of slowdown? The slowdown model that gripped the Washington narrative last month is unlikely to happen. That model — proposed by Anthropic CEO Dario Amodei and embraced by other AI leaders — envisioned a coordinated pause by AI labs while human data scientists and outside auditors worked on better understanding why their models were going haywire and hacking things they weren’t supposed to. But with President Trump firmly not on board, such collective action is probably impossible.

But there’s some evidence AI firms are tapping the brakes independently. OpenAI canceled the release of its most recent model, GPT-6.1 Astra, over safety concerns last week.

There’s also a risk that hyperscalers will grow increasingly gun-shy — and slow their release schedule — as the legal liability from rogue agents racks up. Legislators in the US are also pushing to ensure AI companies bear the legal burden of their agents’ bad deeds.

The popping bubble scenario: There’s also a possibility that investor confidence in AI could sag. That could hurt the Gulf both as a customer of AI innovations coming out of the US — and as an investor in many of the top AI companies, where sovereign institutions from Saudi Arabia, the UAE, and Qatar have taken positions in labs including xAI, OpenAI, and Anthropic.

The story in Egypt is a little clearer. The big story there is still mostly about getting companies to use AI to create efficiencies and save money — not about doing anything at the bleeding edge, executives told us on the sidelines of our Egypt Forum in Cairo this week. The forum focused this year exclusively on AI.

A different lens: “We see that global narrative on why development of these models needs to slow down until you have the right governance and measures in place,” Bassem Fayek (LinkedIn), managing director and partner at Boston Consulting Group in Cairo, tells us. “In Egypt, we are far from thinking with the same lens. We have a much more important lens to look through, which is: How are we able to use such tools and capabilities to make an impact?”