Abu Dhabi throws a surprise challenger into the AI race

OVER RECENT decades the oil-rich economies of the Gulf have shown a taste for flashy government projects with dubious payoffs. In the early 2000s Dubai spent an estimated $12bn building an artificial archipelago shaped like a palm. Last year Qatar splurged around $220bn hosting the football World Cup. Saudi Arabia, the region’s gorilla, is building a pair of 120km-long skyscrapers in the desert—for roughly $1trn.

Amid the vanity projects, some serious efforts at economic diversification are also being pursued. One such endeavour is under way in Abu Dhabi, where earlier this month a government research institute released Falcon 180B, its latest massive artificial-intelligence (AI) model, which is impressing technologists around the world with its performance.

Abu Dhabi has even bigger AI ambitions. “We are entering the game to disrupt the core players,” says Faisal al-Bannai, secretary-general of the Advanced Technology Research Council (ATRC), the government agency which houses the institute that created Falcon. He says that later this year the ATRC will announce the launch of a state-backed AI company to go head to head with the field’s leading lights, such as OpenAI, creator of ChatGPT. Though it will face an uphill battle, the Emirati outfit could yet emerge as a credible competitor. Its success will be closely watched both by rivals and by other governments seeking to carve out a role in an AI economy currently dominated by America and China.

The Technology Innovation Institute (TII), the applied-research arm of the ATRC, employs around 800 staff of 74 nationalities, working on subjects from biotechnology and robotics to quantum computing. Launched in 2020, it has been experimenting with ChatGPT-like “generative” AI for some time. It released Noor, an Arabic-based AI model, in April last year, and then Falcon 40B, the first iteration of its flagship open-source model, in May this year.

Falcon 180B, as its name hints, is a beefed-up version of its predecessor. Comparing the performance of AI models is notoriously tricky, but going by a selection of commonly used benchmarks compiled by Hugging Face, a library of models, TII’s latest release bests the previous open-source champion, Meta’s LLaMA 2. A blog post by Hugging Face staff suggests the model is “on par” with Google’s PaLM 2.

Why make such a powerful model freely available? Mr Bannai talks of “democratising” access to a transformational new technology, and warns against power falling into the hands of a small clique of companies, as has happened in the internet economy. But opening up access to Falcon 180B also allows software engineers to play around with a model that is not quite at the technological frontier, and suggest improvements. According to tii, some 12m developers experimented with the first generation of Falcon.

Giving away the model also opens up other opportunities for monetisation. Consider Stability AI, a startup whose open-source Stable Diffusion model was behind 13bn of the 15bn images generated by AI in the year to August, according to Everypixel, a software firm. Emad Mostaque, Stability AI’s founder, says that its open-source strategy makes “commercial sense” for the firm “because the models are adopted far more quickly and widely than proprietary models”. Although the company generates revenue directly through its DreamStudio text-to-image generator, that tool accounts for a small fraction of the pictures produced using Stable Diffusion. It also makes money from developers opting to build applications based around the model (or others created by the company) on top of its computing platform, and by building tailored solutions for customers.

Mr Bannai has a similar vision. He pictures an “end-to-end platform for AI developers”, pointing to Shopify, an e-commerce platform used by merchants to build online shops, as his inspiration. He says the company will also build new proprietary models and applications tailored for specific fields, such as medicine and law, while keeping access to its core model open. It will experiment, too, with “multimodal” AI systems that incorporate many types of data (from text and images to audio) and “edge” models that can run on smaller devices such as phones.

Abu Dhabi may not seem like an obvious hub for AI talent, but big (and tax-free) salaries have already started luring tech whizzes from abroad. The emirate has also been training local brainboxes, including at the Mohamed bin Zayed University of Artificial Intelligence, founded in 2019. And although it will be a late entrant to an already crowded race, the Emirati firm will have some advantages, too.

One is a tight-knit business milieu. Many bosses are still grappling with how best to harness generative AI. By teaming up with local businesses and using them as test cases, Mr Bannai reckons his agency’s AI company will quickly be able to learn what works and what doesn’t.

Another advantage is the emirate’s deep pockets. Abu Dhabi’s various sovereign-wealth funds hold around $1.5trn in assets, which makes even OpenAI’s $40bn valuation look like chump change. With frontier AI models becoming more computationally intensive and data-guzzling, access to cash could become decisive, especially in a world of higher interest rates.

If the endeavour succeeds, it will be a favourable omen for the long-term prospects of the Gulf as the demand for oil declines. Countries that harbour similar hopes of becoming an AI superpower, including Britain, will be watching along with interest—and, perhaps, envy. ■

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