Chinese President Xi Jinping’s recent visit to Cairo marked the first such trip to Egypt in ten years, emphasizing the strengthening ties between China and Egypt, particularly in technology and artificial intelligence sectors. During his meeting with Egyptian President Abdel Fattah al-Sissi on September 1, the two leaders discussed expanding cooperation in these areas, highlighting the growing significance of tech partnerships in the Middle East and North Africa (MENA).
Shifting Tech Alliances
In a competitive tech landscape, discussions surrounding Huawei’s proposal to establish a data center in Egypt emerged prior to Xi’s arrival. This move prompted a response from the United States, which also sought to secure its stake in Egypt’s burgeoning tech industry. Following Xi’s departure, Egypt’s communications minister engaged with a U.S. group of data center developers, showcasing the dual influence of both powers on the region’s tech infrastructure.
The announcement of Egypt’s first large-scale AI data center—valued at $1 billion and powered by Nvidia technology—underscores this shifting alliance. While China has made considerable inroads in the MENA region, the Nvidia deal suggests that Chinese technology ventures, though numerous, may not yet penetrate deeply into critical tech sectors compared to their U.S. counterparts.
Chinese Engagement in MENA
China has actively engaged MENA countries, securing multiple agreements since 2018 with tech giants in nations like Saudi Arabia and the UAE. For instance, Huawei’s partnership with Saudi Arabia aims to develop AI capabilities specific to Arabic script and speech, while Alibaba Cloud is collaborating on advanced smart-city initiatives within the kingdom. Additionally, companies like SenseTime and Baidu have also formed strategic partnerships targeting local tech demands.
Despite the apparent breadth of Chinese tech ventures in the region, most activities revolve around surveillance and smart-city technologies, often lacking the scale of frontline computing projects pursued by U.S. firms. In contrast, significant contracts facilitated by the U.S., such as a joint venture involving Abu Dhabi’s G42 and Saudi Arabia’s HUMAIN, indicate a robust pursuit of advanced AI capabilities and infrastructure.
Contemporary Geopolitical Dynamics
The competition for influence in MENA between the U.S. and China is palpable, as nations within the region look to harness AI capabilities while navigating the broader geopolitical landscape. According to Xiaomeng Lu, a geo-technology expert, Gulf countries now have the option to select from both superpowers’ offerings. However, many regional tech communities struggle to create alternatives to established foundational AI models from the U.S. or China.
This has led many countries to adapt and build upon existing technologies from both giants. Local AI applications are being developed by leveraging foundational models from the U.S. and China, adjusting them to meet local cultural and linguistic needs. For example, the K2 Think model launched by Mohamed bin Zayed University incorporates Alibaba’s technology and is executed using U.S. hardware.
China’s Strategic Tech Expansion
Despite these challenges, MENA remains a crucial region for China to demonstrate its technological capabilities. The Gulf states are particularly essential in China’s broader tech narrative, offering opportunities to showcase advancements comparable to or exceeding those of the U.S. Beijing’s strategy involves establishing global technological standards across various sectors, from telecommunications to AI.
Recent developments, such as China’s DeepSeek model and Alibaba Cloud’s new investments in Dubai, illustrate the ongoing competition for dominance in the tech landscape. As Chinese firms increasingly deliver e-commerce applications, cloud solutions, and industrial technologies in MENA, they face significant competition from U.S. entities. Nevertheless, as recent partnerships and ventures indicate, the most lucrative opportunities may still favor American companies for the time being.