The Countries Getting Paid by Both Sides of the AI Race
Singapore, Vietnam, and the UAE aren't choosing sides in the AI race. They're charging both sides for access. Here's the economics behind the smartest positioning play in global power.
I’m Victoria — an Economics student and the founder of Axis Brief. Every week I break down one major development at the intersection of AI and global power through the lens of economics. Not to inform you. To equip you.
Everyone is watching America and China.
That’s exactly what Singapore, Vietnam, and the UAE want.
While the world’s attention is fixed on two superpowers competing for dominance, three smaller economies have quietly built something more valuable than allegiance to either side. They’ve built the infrastructure both sides need — and they’re charging accordingly.
This isn’t neutrality. Neutrality is passive. What Singapore, Vietnam, and the UAE are doing is something more deliberate and more profitable.
They made themselves impossible to replace.
The Economics of Being Indispensable
There is a concept in economics called bilateral monopoly — a situation where a single seller faces a single buyer and both sides need each other enough that neither can walk away. The seller extracts maximum value not by competing but by being the only viable option.
Singapore, Vietnam, and the UAE have each applied a version of this logic to geopolitics.
They aren’t selling allegiance. They’re selling access — to capital markets, to manufacturing capacity, to digital infrastructure. And because both America and China need that access, both sides pay for it.
The question worth asking is not whether this strategy is clever. It clearly is. The question is how long it holds — and what it costs to maintain it as the pressure to choose sides increases.
Singapore: The Toll Booth at the World’s Most Important Intersection
Singapore’s GDP is roughly $500 billion. Its geographic footprint is smaller than many cities. Yet it hosts the regional headquarters of more Fortune 500 companies than almost any other city on earth. It processes a disproportionate share of Asian financial flows. And in the last three years it has become one of the fastest-growing AI and data center hubs in the world.
None of this is accidental.
Singapore understood something early that most countries are still figuring out: the most valuable economic position in a bipolar world is not alignment with the stronger side. It’s ownership of the infrastructure both sides need to function.
American banks need Singapore to access Asian capital markets. Chinese firms need Singapore to access Western credibility — to structure deals, raise international funding, and operate within legal frameworks that global investors trust. Singapore provides both services simultaneously and charges both sides for the privilege.
I’ll be honest — when I first looked at Singapore’s foreign direct investment numbers I assumed I was misreading them. Singapore — a city of six million people — consistently attracts more FDI than countries fifty times its size. The explanation isn’t geography. It’s positioning.
What Singapore has built is essentially a toll booth at the most important economic intersection in the world. Every major transaction between East and West passes through it. Every significant capital flow touches it. And unlike a physical toll booth, this one becomes more valuable as traffic increases — not less.
The AI race is increasing traffic.
As U.S. and Chinese tech firms race to build data centers, secure supply chains, and establish regional operations, Singapore keeps appearing as the preferred location. It offers political stability, rule of law, deep talent pools, and — critically — a government that has never forced a foreign company to choose between its American and Chinese relationships.
That last point is worth more than any tax incentive.
Vietnam: The $100 Billion Pivot Nobody Planned
In 2010 Vietnam exported approximately $12 billion worth of goods to the United States. By 2023 that number exceeded $100 billion.
That is not organic growth. That is a structural shift in global manufacturing — and Vietnam was positioned to capture it almost perfectly.
Here is what happened economically. As U.S.-China trade tensions escalated through the 2010s and accelerated after 2018, American companies began executing what became known as the China+1 strategy — keeping Chinese operations while establishing a second manufacturing base outside China to reduce tariff exposure and supply chain concentration risk.
Vietnam was the primary beneficiary.
Samsung moved significant portions of its smartphone production to Vietnam. Intel built one of its largest assembly and test facilities there. LG, Apple’s supplier network, and dozens of other major manufacturers followed. Vietnamese electronics exports — the category you correctly identified as the core — grew from a negligible base to over $100 billion annually, making it one of the fastest manufacturing scale-ups in modern economic history.
But here’s the economic nuance that most coverage misses.
Vietnam didn’t just attract manufacturing that left China. It attracted manufacturing that still depends heavily on Chinese inputs. Semiconductors, components, raw materials — much of what gets assembled in Vietnam begins its journey in China. Vietnamese factories finish the product. Vietnamese export figures record the full value. American importers pay Vietnamese tariff rates.
This arrangement benefits Vietnam enormously. It also means Vietnam’s economic relationship with China remains deep even as its security relationship tilts toward the United States.
Vietnam upgraded its ties with America to a Comprehensive Strategic Partnership in 2023 — the highest diplomatic designation Washington offers. That same year Vietnam’s trade with China hit record levels.
That is not contradiction. That is precision. Vietnam has correctly identified that its economic interests require China’s supply chains and America’s consumer markets simultaneously. Disrupting either relationship costs more than maintaining both.
The balancing act is expensive to sustain. Vietnam walks a narrower path than Singapore — it has less financial cushion, less institutional depth, and a more complicated historical relationship with its largest neighbor. But the economic returns so far have been significant enough to make the tightrope worth walking.
UAE: Buying Sovereignty Before the Window Closes
The UAE’s AI strategy is the most ambitious of the three — and the most economically revealing.
Since 2020 UAE sovereign wealth funds and government entities have committed tens of billions of dollars to AI infrastructure. G42 — Abu Dhabi’s state-linked AI company — has built partnerships with Microsoft, OpenAI, and several Chinese technology firms simultaneously. The UAE has positioned itself as a major data center hub, attracting hyperscaler investment from both American and Chinese cloud providers. And in 2024 the UAE secured a landmark agreement with the United States for access to advanced AI chips — a deal that reflects how seriously Washington takes Abu Dhabi’s emerging role in global AI infrastructure.
To understand why the UAE is doing this you have to understand what the UAE learned from oil.
For decades the Gulf states wielded extraordinary global influence because the world needed their energy. That influence was real but it came with a structural vulnerability — it depended entirely on a single resource that the world was slowly but deliberately moving away from. The UAE watched as the energy transition accelerated and drew the correct economic conclusion: resource dependence is leverage until it isn’t.
The AI infrastructure play is the UAE’s answer to that lesson.
If the UAE successfully builds sovereign AI capability — its own models, its own data centers, its own digital infrastructure that doesn’t depend on American or Chinese systems — it creates something no Gulf state has ever had before. The ability to set its own terms in every major economic negotiation for the next fifty years. Not because it has oil. But because it has the infrastructure others need.
Your instinct about what UAE looks like in 2040 was precise: true independence with its own market. The economic translation of that is a country that cannot be sanctioned into compliance, cannot be technologically isolated, and cannot be forced to choose between Washington and Beijing because it built a third option.
The Third Option Changes Everything
This is where the economics become genuinely consequential.
Right now most of the world faces a binary choice in AI infrastructure. American systems — built on U.S. chips, governed by U.S. law, accessible to U.S. intelligence — or Chinese systems, with their own dependencies and their own risks. Countries that choose American AI accept certain constraints. Countries that choose Chinese AI accept different ones. There is no neutral ground.
Until there is.
If the UAE — backed by Gulf capital, positioned between East and West, with partnerships on both sides — successfully builds credible sovereign AI infrastructure, the binary breaks. Suddenly the world has a third option. And the moment a credible third option exists, the leverage that both America and China currently hold over every other nation weakens permanently.
Neither Washington nor Beijing is publicly accounting for this possibility. Both are focused on each other.
That is a significant strategic oversight.
Countries that have spent decades being pawns in great power competition are watching the UAE’s experiment closely. If it works — if genuine AI sovereignty can be purchased with enough capital and enough diplomatic skill — the lesson spreads. Other nations start asking whether they can build their own version. The bilateral monopoly that America and China currently enjoy over global AI infrastructure starts to erode.
That’s not just an economic shift. That’s a restructuring of global power that changes the terms of every major negotiation for the next half century.
Three Economic Signals Worth Watching
G42’s partnership decisions. Abu Dhabi’s state AI company currently maintains relationships with both American and Chinese technology firms — an unusual position that Washington has already pushed back on. Watch which relationships G42 expands and which it scales back. Those decisions will tell you whether UAE sovereignty is real or performative.
Vietnamese electronics export composition. The ratio of Chinese-input manufacturing to genuinely domestic Vietnamese production is the number that reveals how sustainable Vietnam’s balancing act is. As that ratio shifts — either direction — the strategic position shifts with it.
Singapore’s data center capacity growth. Singapore has actually imposed temporary limits on new data center construction due to energy constraints. How it manages that constraint — who gets capacity and who doesn’t — reveals exactly how it prices access in a world where both superpowers want the same real estate.
Follow the investment flows. Not the diplomatic statements.
What This Means
The AI race is most commonly described as a contest between two powers. That framing is incomplete.
It is a contest being shaped by dozens of smaller economies making calculated decisions about where to position themselves — decisions that will determine the architecture of global trade, technology, and power for the next generation.
Singapore, Vietnam, and the UAE are not bystanders. They are active participants extracting maximum economic value from a competition they did not start and cannot control. The strategies are different. The underlying logic is identical.
Make yourself impossible to replace. Charge accordingly. Keep both sides competing for your partnership.
Most of the world is still figuring out that this is an option.
The ones who figured it out first are already getting paid.
Next week: Why Taiwan is the most economically consequential piece of real estate on earth right now — and it has nothing to do with politics.
— Victoria, Axis Brief