Middle East Funding Pivot Could Destabilize Global AI Infrastructure, Warns Thiel Capital

The global artificial intelligence boom faces a critical funding vulnerability as Middle East sovereign wealth funds, which provide roughly 25% of global AI commitments over the next five years, may pivot their capital priorities. Jack Selby, managing director of Thiel Capital, suggests that markets are currently underpricing the volatility associated with regional conflicts. If instability in Iran persists, nations such as Saudi Arabia and the United Arab Emirates could divert essential capital expenditures from AI infrastructure to internal rebuilding efforts. Selby warns that the impact of canceling these projects could be far larger than current market expectations, potentially rippling through both public and private tech companies. The scale of regional exposure is substantial. Microsoft has committed $15 billion to the UAE by 2029, while Oracle, Nvidia, and Cisco are collaborating on a 5-gigawatt capacity campus in the region. Furthermore, OpenAI has reportedly sought $50 billion from regional funds to fuel its expansion. Beyond geopolitical risks, Selby warns of a broader speculative bubble. With hyperscalers projected to spend over $700 billion this year, he argues that the eventual correction could result in wealth destruction orders of magnitude larger than the dot-com bust. He notes that some regional entities have already begun invoking force majeure on various business contracts, signaling a potential shift in commitment to large-scale data center projects.