Why The U.S. Needs The Gulf States’ AI Minerals Bet

Consider the U.S. International Development Finance Corporation’s critical-minerals fund with two unlikely partners: Abu Dhabi’s sovereign wealth vehicle ADQ and Orion Resource Partners, a private investment firm specializing in mining and metals finance. Washington, in effect, has recruited a country that mines almost none of these minerals—and a firm built to finance exactly that kind of project—to help secure them.

The bigger story here is simple. Gulf sovereign wealth funds—flush with oil-era money and facing a long-term decline in oil demand—are investing their way into the global supply chains for copper, lithium, cobalt, nickel, and rare earths, the raw materials that modern chips, power grids, and AI data centers depend on. For the U.S., that’s an opportunity: China dominates mineral processing today, and Washington can’t build a rival supply chain fast enough on its own. Gulf capital offers relief. Used well, it’s one of the few realistic ways to loosen China’s grip.

Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, has been making this case for a while. The Gulf states, she has written, “should be a central part of U.S. efforts to create resilient supply chains,” given their capital and access to resource-rich markets where Washington has made limited headway. Her reasoning: the U.S. doesn’t have to find and fund risky mining projects in Africa or Central Asia itself if wealthy allies are already doing it.

The UAE runs a similar playbook more quietly, using funds like ADQ to buy stakes in mines and plants it could never build at home, since the desert holds none of the minerals it needs.

The Risks Are Real

Western capital has often stayed away from mining projects in poorer countries, wary of political risk. Gulf capital, backed by governments willing to take on more risk, is filling that gap—just as data centers and grid modernization are proliferating.