How The GCC Can Lead A New Era For Artificial Intelligence

The success seen by DeepSeek – the Chinese artificial intelligence (AI) startup that has jolted the world at large – represents the start of a disruptive artificial intelligence era that provides the GCC nations an opportunity to establish leadership in this field. 

DeepSeek-V2 marks more than just an advancement in artificial intelligence technology, because it represents an opportunity that the GCC needs to grasp. Gulf nations find themselves perfectly situated to benefit from the accelerating market trend of large language model (LLM) commoditization, which enables them to reshape AI economics, while building their status as global AI leaders. 

This technological event serves as a strong wake-up call to the world. DeepSeek's revolutionary business model, together with its advanced design and affordability, demonstrates to the entire AI investing community that its future belongs to those who create the most practical applications based on LLM foundations.  

The GCC can thus use this opportunity to build a separate AI strategic plan that combines reasonable pricing with national independence and international technological alliances. 

LLMS Are Now Just The Beginning  

The main AI product status has been assigned to LLMs for multiple years. However, the dramatic price reduction through DeepSeek dismantles this former belief.  

The technology advancement of LLMs transformed them from finished products into basic tools that serve as construction materials similar to steel or electronic components like microchips. 

Three fundamental changes emerge because of DeepSeek's impact on the market. 

• The price of building AI systems has significantly declined, because DeepSeek requires only US$5.6 million for training, whereas the US’ OpenAI needed $100 million for its training process. 

• DeepSeek provides customers with an 18-fold advantage over traditional LLM offerings, because it costs significantly less than what competitors like OpenAI, Anthropic, and Google charge for their products. Additionally, the market competition has intensified. 

• The AI economy also moves towards operational deployment instead of focusing on LLMs that serve as primary products, because investors put their emphasis on building AI ecosystems and agentic AI applications. 

GCC economies stand at a point where they should redirect their investment efforts from LLM development programs toward building practical AI systems with a strong focus on agentic AI. Because this technology will empower cognitive cities and autonomous industrial sectors as well as next-generation digital economies, the GCC contains a favorable opportunity to gain a leadership position in AI development. 

Deepseek Accelerates Gulf AI Independence 

Saudi Arabia, together with the UAE, has put significant investment into AI infrastructure through their deployment of LLMs like Allam and Falcon. DeepSeek now introduces cost-effective top-tier AI capabilities that transform the financial dynamics of AI technology. As such, Gulf nations have obtained the following benefits by no longer being confined to Western AI ecosystems that carry high costs:  

• The reduced AI model prices create opportunities for swift AI solution development and deployment throughout various industries. 

• The GCC countries can strengthen their AI independence after establishing their own proprietary development capabilities, which enable them to use both Western and Chinese technology frameworks. 

• High-quality and affordable AI models also provide new opportunities for the Middle East to advance its smart city projects and national AI strategies independently from political limitations.

AI Geopolitics: Navigating Between the US And China

The GCC stands between the US and Chinese AI leadership to achieve its AI development goals. Chinese technological progress and inexpensive DeepSeek offerings pressure the United States to evaluate its AI position. The launch of DeepSeek thus requires careful considerations from the GCC nations regarding their position between US and Chinese interests. 

Continued cooperation with US technology corporations allows the GCC to access leading research programs and cloud computing systems while maintaining regulatory harmonization. However, the Gulf nations can achieve fast AI infrastructure expansion through cost-efficient Chinese AI solutions like DeepSeek. 

The ideal path? GCC countries should employ a blended AI approach by uniting US and Chinese partnerships to develop domestic AI systems that function autonomously from any foreign control. 

Beyond LLMs: The AI Commoditization Effect 

DeepSeek initiates the AI commoditization movement that will transform the entire industry through its price impact on LLMs. GCC stakeholders now face a paradigm change, because they need to create value from AI applications, instead of focusing exclusively on purchasing AI tools. 

The industry experiences these modifications according to the following sequence of effects: 

• Startups specialized in LLM training need to pivot toward offering AI-based services and vertical applications and integration solutions, because the LLM specialization alone will become unsustainable. 

• The GCC needs to boost its investments in AI infrastructure specifically by developing data centers for AI-powered automation systems, as well as sector-specific AI solutions for healthcare, along with logistics, energy, and finance sectors. 

• Agentic AI has become the forefront of technological development, as digital employees alongside autonomous city agents lead the next phase of AI operation instead of serving as “question answerers.” The GCC needs to develop its present AI initiatives into operational AI systems. 

A Strategic Plan For The DeepSeek Era 

The GCC should implement three major strategic measures to achieve maximum AI commoditization benefits. 

1. Prioritize AI Applications Over Models

The main direction needs to change from LLM building to application scaling, because it involves automated logistics coupled with intelligent customer services and AI-powered national governance systems. 

2. Speed Up Investments Into AI Infrastructure Along With The Development Of AI Talent Forces

The GCC requires additional sites for AI research along with investments in computing power and academic collaborations with advanced AI laboratories. Plus, the creation of AI regulatory systems will enable countries to draw the top global talent needed for developing Artificial Intelligence. 

3. Hybrid Partnerships Should Be Used To Create AI Sovereignty That Includes Both US Ties And Cost-Efficient Chinese Solutions

To achieve sovereignty in AI development, the GCC nations should manage its research ties with the US, while accepting China's cost-effective AI solutions. The regional AI development program needs to unite both domestic sovereign control systems with international leading AI solutions for optimal results. 

A Defining AI Moment For The Middle East 

DeepSeek serves as an industry alert for AI industries while providing the GCC nations with an opportunity that surpasses all others. Gulf nations can use the rapid market expansion of AI to develop their own AI sovereignty program at lower costs, while building exceptional globally competitive AI applications which will make them AI leadership powers. AI will also provide accessibility for all sectors, which triggers a new competition to create the most impactful AI systems that outpace the largest models. 

The GCC finds itself at an important decision point. The GCC stands at a pivotal point to be the dominator of its own future AI era, yet it might also stick to worldwide AI movement patterns. AI power emerges from proper utilization of DeepSeek-like disruptors, since tool ownership itself does not provide real strength in AI applications. Utilizing AI tools effectively stands as the real power. 

About The Author

Yousef Khalili is the Global Chief Transformation Officer and CEO for the MEA region at Quant, which develops cutting-edge digital employee technology, set to redefine the future of customer experience. 

This article first appeared in the January/February issue of Inc. Arabia magazine. To read the full issue online, click here.