Opportunities and challenges for the US
President Trump has succeeded in “pivoting investment” from the Middle East to the US, creating an alternative financial flow to investments from China. With a commitment of $600 billion from Saudi Arabia, $243 billion from the UAE, and an expected $1.4 trillion from the UAE over the next 10 years, Washington is asserting its role as a smart destination for Gulf investment funds.
The presence of investment funds in deals with Nvidia, Boeing, AMD, Google… reflects long-term confidence in the US economy. This is a parallel approach: the US receives high-quality investment, while the Gulf countries receive technology sharing, security guarantees, and access to large markets.
In addition, after two decades of being bogged down in wars in Iraq, Afghanistan, and Syria and the rise of extremist insurgent groups, the United States has fallen into a state of resource dispersion in the Middle East. In that context, President Trump has laid the foundation for the region’s geo-economic architect instead of continuing to be a “global policeman.” Huge military contracts ensure America’s security interests without expanding its military presence. Thus, the US military power is not declining but is being transformed into a smarter model, more economical in terms of manpower and more effective in terms of strategy.
Promoting investment instead of direct intervention will help the US reduce the burden of defense spending while focusing more on the Indo-Pacific strategy to deal with China. In particular, the US is building a “post-oil” model for the Middle East, helping Gulf countries transition to a knowledge economy, green growth, and digital society, in which the US has an advantage over both China and Russia.
However, the US strategy is also not immune to cyclical and structural risks, especially related to the ability to maintain long-term financial commitments from Saudi Arabia and the UAE.
First, long-term dependence on investment flows from Gulf countries is fraught with risks, especially given the volatile nature of global energy markets. Investment funds such as PIF or Mubadala are largely funded by oil export revenues. Therefore, the ability to maintain huge investment commitments of $600 billion from Saudi Arabia or $1.4 trillion from the UAE over 10 years depends largely on oil price developments. If oil prices fall sharply due to global energy fluctuations, national budgets and Gulf investment funds will be affected, leading to the US possibly losing capital. On the other hand, domestic investment needs to serve economic diversification programs such as Saudi Arabia’s “Vision 2030,” which also pose competitive pressure with investment plans abroad, including in the US. This shows the fragility of the financialization strategy in the absence of sustainable mechanisms in bilateral investment relations.
Second, the policy of adjusting influence in the Middle East also poses complex diplomatic problems for the US, especially related to the conflicts in the regional alliance system. One of the major challenges is to restart or maintain negotiations with Tehran to control the proliferation of nuclear weapons. For Saudi Arabia, any US move to defuse Iran risks being interpreted as a decline in security commitments. Meanwhile, if Washington does not act to control Iran’s nuclear program, the security threat will still exist. Therefore, the Iran issue has become a “balanced hot spot” in US foreign policy, requiring careful calculation to avoid damaging the strategic trust of key allies.
In addition, efforts to normalize relations between Saudi Arabia and Israel, while opening up opportunities to shape a new US-centered regional order, are not without inherent obstacles. For Saudi Arabia’s leadership, normalization with Israel will require major concessions from Tel Aviv on the Palestinian issue in Gaza and the West Bank. If the normalization process fails or stalls, the US will not only lose the opportunity to establish a tripartite Arab-Israeli-US alliance but also risk being judged as ineffective in building regional consensus, thereby expanding the space for competitors such as China to intervene.
Opportunities and challenges for the Middle East
President Trump’s trip marked an unprecedented strategic investment milestone in the Middle East. More than simply reaffirming the role of a traditional ally, Mr. Trump laid the foundation for a new development revolution based on three pillars: high technology, smart infrastructure, and knowledge economy.
Major US corporations such as Amazon, Nvidia, Oracle, Google, Palantir,rce, etc., are collaborating to develop “AI Zones” in Riyadh and Doha. The strategic shift from an oil-dependent model to a knowledge-based economy is turning the Gulf into the world’s new AI hub, opening up hundreds of thousands of jobs and attracting global talent.
Notably, the shift from the oil model to the knowledge economy has not only created hundreds of thousands of high-quality jobs but also shaped a new generation of global human resources, with the participation of technology experts, data scientists, and AI engineers from the US, India, Europe, and East Asia. The Middle East is gradually reshaping the world economic map, no longer only mentioned as the world’s oil well, but is moving towards the new center of technological growth.
Along with the economic momentum comes historic diplomatic progress. One of the big surprises of Trump’s trip was Syria’s announcement that it would join the Abraham Accords, a move seen as a historic leap forward after decades of conflict. Meanwhile, Trump also revealed that the US is “very close” to reaching a new nuclear deal with Iran, which would commit to stopping the production of nuclear material for military purposes.
More importantly, the shift in media discourse has changed. For a long time, the disputes in the Middle East were mainly based on the logic of military deterrence, not negotiation or reconciliation. But now, the tone of diplomatic calm has begun to replace military threats. This creates a rare pause in the violent trend that has lasted for more than 20 years.
One of the profound but less emphasized changes in the international media is the shift in social identity of the Gulf Arab states. In the meetings between Trump and the leaders of Saudi Arabia, the UAE, Qatar, etc., the issues of democracy, women’s rights, or press freedom are no longer the focus. Instead, there is a strategic consensus on technology development, AI, tourism, renewable energy, and logistics.
More importantly, integrating economic and social reforms represents a “middle way” that the Middle East is experimenting with to adapt to the digital age. Instead of opting for Western-style democratization, Muslim countries are choosing to transform their identities, reduce the role of theocracy in national governance, and replace it with a modern, technology-driven state model. This simultaneously helps to weaken the operational base of extremist political Islamist movements such as Al-Qaeda or ISIS.
However, from many perspectives, President Trump’s trip is more about seeking benefits for the United States, and America’s commitments to the long-term future of the region are still a big question mark.
The provisional, uncertain nature of the unprecedented agreements between the US and its Arab allies stems from several aspects. First, bilateral agreements are signed in stages that can last for decades, so when a new administration comes in, the future will be disrupted. Second, the lesson from the way the US sets conditions for Western allies, which have a longer history of engagement than the Middle East, becomes a matter of concern. Nothing is enough to confirm the certainty of Trump 2.0’s policy, especially when he has only been in office for a little over 100 days.
The strategic competition between the US, China, and Russia in the region is leading to a multipolarization of influence, breaking the relative stability that has existed based on the US advantage in the three decades since the Cold War. The fact that Middle Eastern countries have had to adjust their foreign policies to adapt to this trend has highlighted the uncertainty in the regional power structure. Instead of sticking independently to a single pole of power, Gulf countries are increasingly pursuing a flexible hedging strategy, maintaining relations with the US, Russia, and China to optimize their interests. This is also a major challenge in maintaining stability, as each power has its own unique value model, security strategy, and interests.