AI Newsround – Meta and The Middle East

Meta follows Google

• Meta Platforms has followed Google in escaping being broken up by antitrust, as the fast-evolving AI market has been ruled challenging enough such that Meta is no longer a monopoly in its core business.
• Judge Boasberg has ruled that the online world is growing faster than Meta Platforms, meaning that it is steadily losing share and that this trend will accelerate as AI becomes more prevalent in the market for digital life services.
• Facebook, TikTok, Reels, YouTube, Snap and so on have evolved such that their feature set is far similar than they have been in the past, which in turn means that competition is rising rather than falling.  
• As a result, Meta gets to keep its businesses intact, and I don’t think that the judge is wrong, as the emergence of Chinese AI into the open source has caused the company some real problems.
• Until the beginning of 2025, Meta utterly dominated the open source community with its Llama series of models, but since the disappointing launch of Llama 4, the Chinese have pretty much taken over.
• Most start-ups offering an AI-based service are using a Chinese model as their starting point, as opposed to Llama, in a sign that the AI strategy has gone badly wrong.
• Mr Zuckerberg is not standing still and is actively trying to fix the problem, which has resulted in a lot of new talent coming in and some of the old guard leaving, but there remains a long way to go.
• The net result is that I generally agree with the view that Meta is facing a substantial long-term challenge, meaning that breaking up the company would solve nothing.
• With this issue now behind it, the mission is to regain a leading position in the AI race, which will take more than a $105bn splurge of capex in 2026.
• I continue to think that Google is in a better position, and given that it has a lower valuation, this would be the one to pick.

The Middle East: Humain – Chip licence incoming.

• As part of Mohammed bin Salman’s state visit to the USA, it looks like approval for the export of AI chips to Saudi Arabia is about to be granted, but it will be crucial to see how much gets approved, as Saudi Arabia has big plans in this area.
• Humain is the Public Investment Fund (PIF) company that was created by amalgamating all of the AI-related assets across the PIF portfolio into one company.
• It has two main lines of business.
• First is the reinvention of corporate IT such that corporate IT operations are handled by agents rather than traditional software (HUMAIN ONE), and the other is to offer AI compute at a price that no one else can match.
• It is this second strategy that is likely to be the majority of Humain’s business as it plans to roll out 6GW over the next 5 years or so, with 400MW of this coming online in 2026.
• This is where the number of chips that Saudi Arabia is licensed for is important, as 6GW roughly equates to 6m chips, meaning that if just 100,000 are licensed, then Humain will be unable to meet this goal.
• I suspect that the licence will be issued for somewhere between 500,000 and 1m chips as this would meet the 2026 requirements and give it some space before applying for the next tranche.
• Humain will be applying to import chips from many players as its architecture includes Nvidia, AMD, Groq and Qualcomm.
• Consequently, the grant of this licence is also particularly important to Qualcomm as it will enable it to record revenues for its fledgling data centre business in 2026.
• This architecture, plus cheap power and abundant real estate, is how Humain thinks it can offer AI compute 40% cheaper than anyone else, but I suspect that the UAE at least will be able to give it a run for its money.
• This is the Middle East’s AI strategy in a nutshell, and as long as the licenses are granted and demand for compute remains robust, this should be a good strategy to diversify the economies of the region.
• This leads me to remain pretty positive on the outlook for this new industry in the Middle East and to expect that it will become a significant provider of compute, in the same way that it is a significant provider of energy today.