The relationship between the U.S. government and its leading industries has long shaped the arc of its foreign policy, evolving with each era’s foundational technologies. In the mid-20th century, that foundation was oil. Today, it is artificial intelligence (AI). A striking parallel emerges between Cold War-era energy diplomacy and the modern statecraft surrounding AI, as the U.S. again aligns national strategy with industrial strength to cement its global position.
This connection was made concrete during President Trump’s recent Middle East tour, accompanied by a high-profile delegation of U.S. tech CEOs. The mission was clear: deepen economic ties, secure capital commitments, and extend U.S. influence in the race for AI supremacy. Much like the Cold War’s oil diplomacy, the U.S. is now leveraging its AI leadership to build alliances and outmaneuver geopolitical rivals.
The Middle East, long defined by its oil reserves, is repositioning itself as a global AI hub. Nations like Saudi Arabia and the UAE are seeking to diversify their economies and reduce dependence on fossil fuels. With abundant energy, sovereign capital exceeding $5 trillion, and strong state support, the Gulf has become fertile ground for next-generation AI infrastructure.
A state-backed AI company under its Public Investment Fund (PIF), is planning to launch a $10 billion venture capital fund.
Are investing $10 billion to jointly build and operate an AI hub in Saudi Arabia.
Announced a joint $5 billion investment to build an “AI Zone” in the kingdom to grow demand for advanced AI services, in addition to a previously announced $5.3 billion to develop Saudi Arabia as a new AWS region.
Announced it was investing $14 billion in Saudi Arabia’s digital cloud and AI infrastructure over 10 years.
Is reportedly building a $1 billion data center to meet growing demand for cloud, AI, and enterprise workloads.
At stake is not just regional leadership but global influence. Trump’s rollback of Biden-era chip export restrictions to the Gulf was a calculated signal: the U.S. wants allies in the Middle East tethered to American AI supply chains, not Beijing’s.
This new wave of AI diplomacy echoes the U.S.’s Cold War strategy, when oil was the core geopolitical asset. In the 1950s–70s, American foreign policy centered on ensuring access to Middle Eastern oil to fuel its economy and military, while containing Soviet expansion.
The most iconic embodiment of this was ARAMCO (Arabian American Oil Company), a joint venture between U.S. oil companies and the Saudi state. This partnership wasn’t just commercial; it was geopolitical infrastructure. It enabled the U.S. to project influence, stabilize energy prices, and outmaneuver the USSR in a region critical to global growth.
The same themes echo today: state-industry alliances, infrastructure as diplomacy, and a battle for control over foundational resources.
If Exxon, Shell, and BP were the industrial titans of the 20th century, then Amazon (AWS), Microsoft (Azure), Nvidia, Google (Cloud), and Oracle are their 21st-century counterparts. These firms aren’t just developing AI applications, they’re building the critical infrastructure underpinning the AI economy: chip supply chains, hyperscale data centers, sovereign AI models, and energy-intensive compute zones.
Like the Oil Majors, They Are:
Diversifying Upstream and Downstream
AI firms are integrating vertically, from chip design (Nvidia) to power supply (renewables for data centers).
Shaping Policy:
These companies actively influence regulations on data governance, chip exports, and cybersecurity standards, just as oil majors once shaped energy policy.
Building Resilience Through Infrastructure:
Control over physical and digital infrastructure, from energy sources to global compute networks, mirrors how oil majors secured refining and distribution.
Rather than chasing hype cycles, private investors should think like the oil investors of the past, focused on infrastructure, embedded value, and state-aligned moats. Here are a few strategic markers to monitor:
Compute + Energy Convergence
Watch for AI firms investing in or partnering with nuclear, solar, or hydrogen energy providers to power compute demands.
Regulatory Favoritism
Track firms winning defense contracts, public-sector AI deals, or exemptions from export controls. Government alignment is becoming a strategic asset.
Infrastructure Over Applications
Prefer firms building the rails (compute, cloud, chips, data centers) rather than just riding them with trend-driven applications.
Sovereign Model Development
Nations are pushing for sovereign AI models. Firms at the intersection of AI capability and data residency compliance will be best positioned.
Durability Across Cycles
Bet on players with capital discipline and cross-sector utility, not just those surfing the current wave.
The lessons of the oil era are instructive. Dominance wasn’t about the resource alone; it was about the infrastructure built around it, the political relationships it enabled, and the adaptability of firms to survive energy transitions and geopolitical shocks.
Today’s AI barons are following that same blueprint. They’re not just building products, they’re building the rails of the next industrial age. And for investors, that’s where the real staying power lies.
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References:
https://www.cfr.org/timeline/oil-dependence-and-us-foreign-policy
https://time.com/7285232/trump-ai-middle-east-chip-export
https://www.fpri.org/article/2009/08/the-u-s-and-saudi-arabia-since-the-1930s/
https://builtin.com/articles/ai-infrastructure-national-sovereignty
