The world of computer chess long ago moved beyond a room full of programmers eating pizza while their creations battled it out. Since Kasparov matches against Deep Blue in 96 and 97 is has been in the public consciousness.
The nationalistic aspect of computer chess has receded since Kaissa and CHESS played out the cold war in the 70's. It's still a coup for some small countries – who find it hard to compete in major sports – to find a geek champion. The Israeli world champion program Junior and its programmers Ban and Bushinsky are an example of this.
Now we've have an interesting case of carpetbagging. The ChessBase hardware project Brutus is now being sponsored by a Pakistani-run company that is bankrolled by a Saudi. This has led to a name change ("Hydra") and a change in the nationality of the program in tournaments to the United Arab Emirates although Austrian Chrilly Donninger of Nimzo fame is still in charge of the project. Hydra just won the strong Paderborn event ahead of Fritz and Shredder but it's play wasn't all that impressive.
That bottom line is that people aren't going to pay the $200+ for a piece of chess hardware unless it is much, MUCH stronger than $40 software that gets stronger every time you upgrade your PC. Hydra is far from being that strong despite the use in Paderborn of a distributed system with eight specialized chess cards on four dual Xeon servers, hardly something you would have in your home unless you live at NASA.
20 years ago Ken Thompson's Belle made it clear that the best hardware money could buy would beat the best software on the fastest CPUs. Deep Blue was further proof of this, even though its win over Kasparov practically guaranteed there wouldn't be another "money could buy" situation and hardware chess pretty much disappeared while software kept getting smarter and microprocessors kept getting faster.
Brutus/Hydra is sort of like Deep Blue on the (relative) cheap, using upgradeable FPGA cards that piggyback on PCs. There doesn't seem any reason to doubt that with continued investment it will dominate the computer chess circuit for a while. Will it be good enough to reach the big time, meaning a match against a Kasparov or Kramnik? (Call me a polemicist but with the Palgames sponsor being mostly Pakistani, India's Anand might not be on the menu.)
To reach that level Hydra will have to utterly dominate. The comically hyperbolic press release at the Hydra site is not a good start. It also seems more than a little disingenuous to go on about this as a triumph of UAE development when all they are doing is signing checks to the original creators. (It even says "created by PAL Group," which is simply false.) True, the sponsor gets what the sponsor wants on the sponsor's website, but it's a little like my buying a BMW and calling it a triumph of Mig technology.
But new money coming into chess is rarely a bad thing and if PAL wants to wrap itself and its new toy in a big Arab Emirates flag and use it for national publicity, that's their right. If they have any sense they'll stay close to ChessBase, who know computer chess and promoting it and who developed the product to begin with.