Mining executives have welcomed a sharp upswing in investor interest from the Middle East, as Gulf states seek to expand their critical mineral ambitions and take on established global players.

Critical minerals refer to a subset of materials considered essential to the energy transition. These resources, which tend to have a high risk of supply chain disruption, include metals such as copper, lithium, nickel, cobalt and rare earth elements.

“The interest in rare earths in this part of the world is phenomenal,” Tony Sage, CEO of U.S.-listed rare earths miner Critical Metals, said during a business trip through the Middle East.

“I didn’t expect it because, you know, they can’t mine it. There [are] really no discoveries in this area, but they want to be able to participate somehow in the downstream,” Sage told CNBC by telephone.

His comments come as policymakers and business leaders flock to Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, an event nicknamed as the “Davos in the Desert.”

The annual event, which got underway on Monday, is being held under the theme: “The Key to Prosperity: Unlocking New Frontiers of Growth.” It is expected this year’s FII will lean into areas such as artificial intelligence, particularly as the oil-rich kingdom continues with its mission to diversify its economy.

Analysts say Gulf states, led by the likes of Saudi Arabia and the UAE, are increasingly seeking to leverage their financial capital and geographic location to capture critical minerals market share.

A series of targeted acquisitions and international partnerships forms a key part of this regional strategy, according to an analysis by the International Institute for Strategic Studies (IISS), with Gulf states seeking to present themselves as alternative partners to Western nations.

Critical Metals, for its part, has partnered with Saudi Arabia’s Obeikan Group to build a large-scale lithium hydroxide processing plant in the kingdom.

Rare earth elements have emerged as a key bargaining chip in the ongoing U.S.-China trade war, although global stocks rallied on Monday amid investor hopes of thawing tensions between the world’s two largest economies.

U.S. officials have touted the prospect of China delaying strict rare earth export controls as part of a high-stakes summit between President Donald Trump and China’s Xi Jinping on Thursday.

Rare earths refer to 17 elements on the periodic table whose atomic structure gives them special magnetic properties. These elements are widely used in the automotive, robotics and defense sectors.

Shaun Bunn, managing director at London-listed Empire Metals, said his company had also received considerable investor interest from the Middle East.

“I think that it is very much part of the kingdom’s strategic push to diversify away from its oil. I mean, they are always going to make the most money out of oil at the moment at least, but they are trying to diversify,” Bunn told CNBC by telephone.

“Many of Saudi Arabia’s mining ventures remain in early or even conceptual stages, and the country still depends on foreign partners for expertise, such that it may take years for Saudi Arabia, and the Gulf states more generally, to scale up enough to dent Chinese dominance or to fully meet Western demand,” Asna Wajid, research analyst at IISS, said in an analysis published in late July.

“Many in the West, moreover, may be wary of replacing their dependence on China with dependence on the Gulf states, which already exercise considerable strategic leverage due to their oil and gas supplies,” Wajid said.

China is the undisputed leader of the critical minerals supply chain, producing roughly 70% of the world’s supply of rare earths and processing almost 90%, which means it is importing these materials from other countries and processing them.

U.S. officials have previously warned that this dominance poses a strategic challenge amid the pivot to more sustainable energy sources.

Google and American electrical utility giant NextEra Energy announced a partnership Monday to revive Iowa’s only nuclear power plant to meet growing low-carbon energy demand from artificial intelligence

The Duane Arnold Energy Center, which closed in 2020, could begin operating in early 2029, pending regulatory approval.

“Once operational, Google will purchase power from the 615-MW plant as a 24/7 carbon-free energy source to help power Google’s growing cloud and AI infrastructure in Iowa, while also strengthening local grid reliability,” the companies said in a press release.  

The Central Iowa Power Cooperative, the state’s largest energy provider, has agreed to buy surplus electricity leftover by Google.

The Duane Arnold Energy Center’s prior shutdown had come at a time when the nuclear sector was struggling to compete with natural gas and other renewable energy sources due to high operating costs and public perception challenges around safety.

However, the nuclear site’s revival marks a trend, as energy demand in the U.S. has been surging, with tech companies like Google investing billions in developing power-hungry AI data centers. 

According to the U.S. Energy Information Administration, total annual electricity consumption stateside hit a record high in 2024 — a ceiling that could continue to rise if data centers continue to expand at their current pace.

In the face of rising energy demands, Washington and the tech industry have been pushing nuclear energy as a potential way to address growing concerns about AI computing’s impacts on local energy grids.  

The Iowa project follows similar nuclear partnerships, including one between Constellation Energy and Microsoft. Meanwhile, computer giant Oracle recently said it is designing a data center powered by three small nuclear reactors.

In addition to bringing more energy online, nuclear energy provides a potential pathway for Big Tech to continue their data center rollout while also curbing carbon emissions. 

“[The Google-NextEra partnership] serves as a model for the investments needed across the country to build energy capacity and deliver reliable, clean power, while protecting affordability and creating jobs that will drive the AI-driven economy,” Ruth Porat, president and chief investment officer of Alphabet and Google, said.

Media outlets had taken note when Google, in June, had quietly removed its commitment to achieving net-zero carbon emissions by 2030 from the main page of its corporate sustainability website amid expansion of its AI plans. 

Data center projects across the U.S. have also faced growing public pushback. In September, Google withdrew plans for a new data center in Indiana after community groups raised concerns about resource use and environmental impacts, local media reported. 

On the other hand, Iowa has so far proved receptive to such projects, with Google having invested more than $6.8 billion into data centers in the state. Iowa lawmakers have praised the latest project in the joint release, saying it will support local jobs and energy grids.

“Bringing Duane Arnold back online is a big win for Linn County and the entire state of Iowa,” State Senator Charlie McClintock said, adding that the announcement shows Iowa can “keep the lights” on for residents and businesses.

Think of Saudi Arabia and the first thing that comes to mind might be its massive, oil-derived wealth.

While oil continues to drive Saudi Arabia’s economy, the kingdom is now expanding into areas such as artificial intelligence, tourism and sports to diversify its growth avenues.

According to Saudi Arabia’s Minister for Investment Khalid Al Falih, more than half — 50.6% — of the Saudi economy is now “completely decoupled” from oil.

“This percentage is growing,” Al Failh told CNBC’s Dan Murphy, adding that government revenue used to be almost completely derived from oil money, but now, 40% of its revenue comes from sectors and sources that “have nothing to do with oil.”

“We’re seeing great results, but we’re not satisfied. We want to do more. We want to accelerate the kingdom’s diversification and growth story,” he said.

Saudi Arabia is doubling down on fast-growing sectors such as artificial intelligence, naming it one of its new growth areas, with Al Failh saying the kingdom will be a “key investor” in developing AI applications and large language models. Saudi Arabia would also build data centers “at a scale and at a competitive cost not achieved anywhere else.”

“AI has emerged [in] the last three, four years, and it’s definitely going to define how the future economy of every nation. Those who invest will lead, and those who lag behind, unfortunately, will lose,” he pointed out.

On Monday, AI chip company Groq’s CEO, Jonathan Ross, told CNBC that  for AI infrastructure thanks to its energy surplus. The country could see more than $135 billion in gains by 2030 thanks to AI, according to PwC.

Saudi Arabia’s quarterly budget performance report revealed that total government revenue for the first half of 2025 came in at 565.21 billion Saudi riyals ($150.73 billion), with oil making up 53.4% of the country’s overall revenue, down from 67.97% in the same period in 2019.

In 2024, the country reported a 1.3% rise in full-year GDP, mainly driven by a 4.3% increase in non-oil segments. Oil activity, on the other hand, fell 4.5% year on year.

The country’s sovereign wealth fund — the Public Investment Fund — has acquired stakes in tech giants, video game publishers and football clubs as it uses oil revenues to diversify into other sectors.

PIF has acquired stakes in video-game heavyweight Electronic Arts, establishing the SoftBank Vision Fund with Masayoshi Son’s SoftBank Group Corp in 2017, and a takeover of English Premier League club Newcastle United in 2021.

When asked if declining oil prices were piling pressure on Saudi Arabia’s economy and government revenue, Al Falih said that the country was not scaling back budgets and there were no cuts to public spending.

Oil prices have fallen in 2025, with Brent crude spot prices down 13.4% so far this year, according to FactSet. Saudi Arabia’s oil revenue slid 24% in the first half of 2025 from a year earlier.

The government will continue to address all activities that require government spending, Al Falih said, noting that the PIF has grown sixfold since its creation and that the country was approaching nearly $1 trillion in capital deployed across sectors of strategic interest.

Tourism has also been a key growth area for Saudi Arabia. Ahmed Al-Khateeb, the country’s tourism minister, told CNBC that the sector’s share in GDP had grown to 5% in 2024 from 3% in 2019.

“We are [opening] resorts, new airlines, new airports, and the numbers are growing, and we are focusing on countries and visitors that are coming from outside to experience our great culture,” Al-Khateeb highlighted.

The tourism minister also expressed confidence that the sector could contribute 10% of GDP by 2030, aiming to raise it to 20% eventually.

“This 20% will help Saudi Arabia to diversify the economy and make it more sustainable,” he added.