Pragmatic AI sovereignty: Architecting AI value chains for control and continuity in the Gulf countries

Learned a lot lending an editorial hand here:

PwC Strategy&, August 31, 2026

by Chady Smayra, Ramzi Khoury, and Sreedhar Nair



Often, the quest to achieve leadership in the global competition that has arisen around artificial intelligence (AI) is reduced to seeking access to chips. But chips are only one component of the AI value chain. To attain a leadership position in AI, countries in the Gulf Cooperation Council (GCC) and beyond must adopt a more nuanced approach that encompasses the entire AI value chain, including chips, compute infrastructure, cloud platforms, models, data and other elements.

We call this pragmatic AI sovereignty. It seeks to balance the need for control over the AI value chain with the need for continuous access to its components. In doing so, pragmatic AI sovereignty mitigates the risks of both external dependence and internal fragility.

There is no single way to achieve pragmatic AI sovereignty. Government leaders and other stakeholders must consider each aspect of the value chain in terms of its concentration, capital intensity, strategic sensitivity and value creation potential.

Then, leaders can determine which posture or combination of postures can be used to secure access to the layers of value. There are four postures they can use: assure, which secures a layer via agreements, allocation, diversification or contractual safeguards; control, which secures a layer by owning, operating or governing it; partner, which secures a layer via partnership with a global player while maintaining local governance, localization, resilience and exit rights; and influence, which secures a layer using capital, regulation, procurement or market access to shape its standards, capital flows, supplier priorities or policy dialogues.

The GCC countries are well positioned to not only secure their own pragmatic AI sovereignty, but also shape how AI ecosystems evolve across adjacent markets. To succeed and lead in the AI era, they will secure access where it matters, assert control where it is critical and build leadership where value can be captured. Read the full viewpoint here.

Redefining the social contract: Policy options for economic inclusion and fiscal sustainability

Learned a lot lending an editorial hand here:

PwC Strategy& Middle East, January 2025

by Chadi N. Moujaes, Sami Zaki, Mitcha Sleiman and Dr. Steffen Hertog

Following the 1970s oil boom, the Gulf Cooperation Council (GCC)1 countries developed a generous welfare model offering a wide range of benefits to nationals, including public-sector employment, energy subsidies, a variety of non-means-tested categorical benefits, and free public services such as education and healthcare. Governments now understand that this implicit social contract needs reform, given fiscal constraints and demographic pressures. 

Although GCC governments are responding to this challenge, thus far reforms have been piecemeal. Creating a new social contract requires simultaneous fiscal reform, welfare modernization, and labor policy changes. Moreover, governments need to design and implement the contract components specifically for each country’s needs. 

There are five policy tools that GCC governments can consider as they redesign their social contracts, described below: 

• Permanent income supplements for lower earners can make private-sector employment more attractive to nationals. Such income support ensures that the shift away from public-sector employment does not result in “working poor.” 

• Active labor market policies, including lifelong learning, job services, and training, can support nationals’ integration into the private sector. 

• Universal basic income (UBI) can provide all nationals with income security, while maintaining incentives for private-sector entrepreneurship and work. 

• Means-tested social benefits can support those that need it most, while reducing welfare dependency and fraud. 

• Integration of foreign residents through dedicated welfare tools, such as a modest minimum wage, can attract and ensure a ready workforce of foreigners, while reducing the differential in labor rights and costs that discourages employers from hiring nationals.

A new social contract in GCC countries can provide opportunities to all nationals, guarantee basic welfare for all, incentivize and improve the rewards for private economic activity, ensure fiscal sustainability, and minimize economic distortions. Read the full report here.