The Gulf wants to break free from the world’s data chokepoints

Welcome to this week’s Fortune Gulf Brief. We’ll be covering:  

• The new data highways taking shape across the Gulf 
• Dubai crypto exchange hit with U.S. sanctions over $4 billion Iran network 
• UAE non-oil activity climbs to four-month high 
• ADNOC L&S profits quadruple, outlook lifted again 
• And, three things we enjoyed reading this week  

The GCC’s AI ambitions are creating a parallel infrastructure race—Gulf countries and telecom companies are trying not only to build enough computing power, but also to control the fibre and cable networks that carry the resulting data.  

Currently, over 90% of Europe–Asia data and telecommunications traffic flows through Egypt and the subsea cable corridors converging at the Red Sea and Suez Canal region.  

Today’s geopolitical instability is making the construction of alternative routes a strategic imperative.  

The UAE, Saudi, and Qatar are all racing to build out these routes. Qatari Ooredoo’s Fibre in the Gulf (FIG) system is on track to be the largest subsea cable system ever built in the GCC.  

Set for completion in late 2027, the $500 million system will span almost 2,000 kilometers, linking all six GCC states and Iraq, while bypassing the Suez Canal and Bab-el-Mandeb strait entirely. 

Ooredoo Group’s CEO Aziz Aluthman Fakhroo told me that the Iran war had “reinforced the proposition” of FIG. 

But its proposition is not without challenges. A key section of FIG is due to pass through the Strait of Hormuz, with Fakhroo acknowledging “we currently can’t get the cable-laying ships inside Hormuz.” 

Of course, a bigger question looms in the longer term: To what extent will the current war and its aftermath threaten the viability of the digital highways that are being built across and beyond the Gulf.  

You can read my full interview with Fakhroo in my piece here.

And, in case you missed it, Fortune got the scoop last week on the news that Ooreedoo has teamed up with Nvidia and Nokia to launch a multi-billion-dollar AI compute and neo-cloud platform in Indonesia. 

For Ooredoo, the move diversifies the group’s geographic footprint beyond its core Middle Eastern markets, while also deepening its exposure to Southeast Asia where AI adoption is showing stronger momentum than the global average.  

Click here to read my exclusive. 

Melissa Hancock

As ever, thanks for reading, and do keep in touch with your thoughts and ideas. See you next week.
melissa.hancock@fortune.com 

U.S. Targets Dubai Crypto Exchange in Alleged $4BN Iran Sanctions Dodge

The U.S. Treasury has sanctioned Shelbit, a Dubai-based cryptocurrency exchange, that allegedly served as the hub of a $4 billion scheme used to evade Iranian sanctions.  

 The designation followed a Reuters investigation that found that Shelbit moved crypto on behalf of Iran’s central bank, one of the world’s largest illegal online gambling networks, to addresses linked by the Israeli government to the Islamic Revolutionary Guard Corps (IRGC). 

“Treasury will ​hunt down and dismantle the illicit financial networks that keep the regime afloat,” commented Treasury Secretary Scott Bessent. 

The U.S. Treasury’s designation follows a notice issued on 24 July from Dubai’s Virtual Assets Regulatory Authority (VARA) finding that Shelbit had violated anti-money-laundering and counter-terrorism financing laws.  

Shelbit hadn’t been licensed by VARA since 2025, while one of its owners was deported from the UAE in April. Shelbit has denied the allegations, stating: “Shelbit LLC categorically rejects any suggestion that the company knowingly participated in money laundering, terrorist financing, illegal gambling activity, sanctions evasion, or activity on behalf of any sanctioned, military, or governmental organization.” 

Meanwhile Daniel Kinahan was extradited from Dubai to Ireland on Sunday following his arrest in Dubai in April. He has been charged with a single offense—directing the activities of a criminal organization between October 2015 and April 2017. His lawyers have previously said that the allegations that he is a crime boss are false and have no evidential basis. 

It is seen as a sign that the emirate is taking a tougher stance against people on the U.S. Treasury sanctions list. The U.S. Treasury imposed sanctions on Kinahan and the organization it identified as the Kinahan Transnational Criminal Organisation (KTCO) in 2022. 

In February 2024, the UAE was removed from the Financial Action Task Force’s (FATF) “grey list” of jurisdictions under increased monitoring in recognition of its improved ability to tackle illicit money flows.   

Being on the “grey list” made it more difficult for UAE businesses to conduct cross-border transactions, as financial institutions often had to undertake enhanced country-level due diligence. This resulted in longer deal timelines and higher compliance costs.  

UAE’s non-oil growth hits four-month high as jobs bounce back

The UAE’s non-oil private sector grew at its fastest pace in four months in ​July, while employment numbers rose amid a recovery from the U.S.-Iran war.  

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index climbed to 52.7 from 50.8 in June; the 50-mark ⁠separates growth from contraction. 

New orders expanded at the fastest pace since February, while export business increased for the first time since March and at the quickest rate ​in a year, helped by improving activity elsewhere in the region.  

The UAE’s labour market, which experienced one of the sharpest contractions in June since the height of the Covid-19 pandemic, returned to growth in July, with firms citing stronger demand as a justification for renewed hiring.   

David Owen, principal economist at S&P Global Market Intelligence, said the July data signalled “a restoration of business confidence and a period of smoother trade flows.”  

However, business confidence towards future output fell to its lowest level since March, with only 7% of firms predicting an uplift over the coming year. 

“The volatile situation in the Strait of Hormuz continues to make the future uncertain and kept price pressures elevated in July,” Owen said. 

On 28 July, Moody’s changed its MENA outlook from stable to negative, noting that the impairment of shipping through the Strait of Hormuz will weigh on the growth of Gulf sovereigns, as well as their fiscal and external positions.  

War Is paying off for Gulf shipping’s biggest players

ADNOC Logistics & Services (ADNOC L&S), a unit of Abu Dhabi state oil company ADNOC, has been busy making sure it doesn’t let a good crisis go to waste.  

The U.S.-Iran war has sent shipping demand and charter rates soaring as operators navigate heightened security risks and disrupted regional trade routes. 

This has led ADNOC L&S’s second-quarter profit to surge 303% year-on-year to $951 million, as additional services to deliver energy worldwide and a global increase in shipping charter rates outweighed the disruption caused by the war.  

The company has now lifted its 2026 net profit growth guidance to more than 110%, from an earlier forecast of over 60%, marking the third time it has raised its profit outlook this year. 

ADNOC L&S last week announced the $1.3 billion acquisition of 11 vessels as it moves to expand its gas and crude shipping capacity. 

The deal followed an order last month for four next-generation LNG carriers worth about $900 million, which will be built by Jiangnan Shipyard in Shanghai. 

Shipping giant Clarkson’s is another corporate beneficiary of the maritime disruption.  

Its broking business delivered its strongest-ever first-half performance, with revenue climbing to £413.5 million and operating profits up 55% to £64.8 million.  

CEO Andi Case noted “the exceptional volatility caused by the disruption to global trade from global conflict, including the situation in the Strait of Hormuz.”  

Clarkson’s board now expects full-year performance to be materially ahead of market expectations, given the exceptional strength seen in the first half. 

The Big Number

The 3 things we enjoyed reading this week

• Chevron is positioning itself as an unlikely winner of the AI boom—not by building chips, but by supplying the vast amounts of electricity data centers need. Its flagship Project Kilby pairs Chevron’s natural gas, land, and project expertise with power-generation infrastructure to deliver 2.67 gigawatts to Microsoft in West Texas under a 20-year deal. As Fortune’s Jordan Blum explains, the project highlights a growing problem for AI: hyperscalers need huge amounts of reliable power, and the grid can’t always deliver it fast enough. 
• Battered by hundreds of Iranian missiles and drones plus Houthi and militia proxy attacks, Saudi Arabia has hedged its bets beyond Washington by signing the Mecca Joint Defence Agreement with Turkey and Pakistan—a mutual-defense pact linking it to NATO’s second-largest army and a nuclear-armed ally. Its biggest test may come through Iran-backed proxies in Yemen or Iraq, forcing the new partners to decide how far they are willing to go in each other’s defence. The result is a Gulf where the post-war rules—and who gets to set them—are being rewritten, as this opinion piece by former White House deputy national security adviser Mark Pfeifle explores.  
• Middle Eastern viewers are quietly becoming Twitch’s most loyal spenders, financially supporting creators at rates nearly matching the U.S. even though Arabic-language channels still pull smaller audiences than English-language giants. Esports has been a key gateway for Twitch into the Middle East, where spending on tournaments, clubs and gaming infrastructure has accelerated. The video live-streaming platform, which is owned by Amazon, is seeing Saudi streamers build sizeable followings by blending competitive gaming with reactions, conversation, and direct interaction.