By Anthon?Garcia? and Emmy Borromeo
AI could potentially inject $15.7 trillion into the global economy by 2030. Acknowledging that a more sophisticated AI-driven future is on the horizon, with many AI technologies and applications already in use, Middle Eastern countries like the UAE and Saudi Arabia are rolling out initiatives to nurture AI innovations and become global AI leaders.
The AI race is on. After all, it might as well be the most important driver of growth in today’s era — with a potential $15.7 trillion contribution to the global economy by 2030, according to PwC. With this, it comes as no surprise that everybody wants a piece of the pie.
However, anyone aspiring to be the epicentre of AI must tick off a lot of things. It’s all about building the necessary infrastructure, implementing policies, pouring and attracting investments, and, of course, nurturing talents and startups.
AI’s economic impact can’t be ignored
The Middle East recognises how impactful AI is. This is why over the past years, two of the biggest economies in the region — the United Arab Emirates (UAE) and Saudi Arabia — have been adamant in pushing their respective AI agenda.
The region’s betting big on AI is not at all unexpected. Though it’s home to many oil-wealthy nations, its quest for economic diversification is in full swing. And countries like the UAE and Saudi Arabia are turning to tech — AI in particular — to drive growth and expand their economic horizons.
A well-cited PwC report shows that AI could contribute about $320 billion to the Middle East’s economy by 2030.
In the UAE, AI could account for 14% of its GDP by the said year — the highest percentage compared to other Middle Eastern nations. Meanwhile, Saudi Arabia is expected to be the biggest gainer in terms of absolute value, as AI could inject about $135.2 billion into its economy.
As these countries move beyond oil dependency, they have transformed to become a thriving playground for startups.
Building a robust AI ecosystem
In the UAE, the National AI Strategy 2031 serves as the backbone of its efforts. The goal? To establish the country as a global AI hub, with AI investments encompassing governance, research, and economic applications.
Nurturing startups is one of the main initiatives under this blueprint.
Major cities like Abu Dhabi and Dubai heeded the government’s call and have since launched programmes to support budding AI entities. For example, Hub71, Abu Dhabi’s flagship tech hub, offers AI startups access to funding, mentorship, and office space. Meanwhile, Dubai Future Accelerators (DFA) connects startups with government agencies and major enterprises to tackle real-world challenges using AI.
“Government support is huge for AI startups. It’s not just about funding but also about creating ecosystems that foster collaboration and innovation,” Alexander Epure, CEO and Co-Founder at Queros, tells The European Business Review via an email interview. Queros, founded in 2021, is an intelligent platform for building careers.
“Initiatives like the National AI Strategy give startups the confidence to experiment and grow while providing access to resources and networks that can accelerate their journey,” he adds.
In Saudi Arabia, it’s the National Strategy for Data and Artificial Intelligence that serves as its roadmap for AI dominance. And just like the UAE, its path toward becoming an AI superpower also largely hinges on supporting startups.
In a bid to boost its AI startup ecosystem, the Kingdom launched AI.M (Artificial Intelligence Mission), with a dedicated AIM-X accelerator led by SparkLabs AI Lab.
“The four-month programme will provide bespoke mentorship and business development strategy for each company, culminating in a Demo Day for the cohort to present their stories in the presence of key leaders and investors in the region. The programme is also partnering with KAUST and will collaborate on R&D opportunities, as well as work with university talents and provide them with access to the SparkLabs tech ecosystem,” William Chu, Managing Partner at SparkLabs AI Lab, shares with The European Business Review.
“Our programme welcomes startups from all over the world who want to expand their businesses into the region. We believe programmes like ours will create a pipeline of companies providing AI solutions that can be deployed across the MENA region to accelerate the local tech ecosystems and encourage entrepreneurship. We also want to work closely with regional governments to address AI education to their citizens to equip their population with technology and AI literacy in a rapidly changing landscape,” he further states.
A growing AI market
The region’s commitment to AI, as exemplified by the UAE and Saudi Arabia, is evident in the growing number of startups and investments.
According to January 2025 data from Tracxn, a global startup data platform, the Middle East has about 2,970 AI companies, with over 1,000 funded companies collectively raising $19.5 billion in venture capital and private equity.
About 330 of these AI startups were only founded in 2020, the year that saw the highest number of AI startups established over the past decade. In the last 10 years, the AI sector also saw funding of around $17.6 billion — with the highest funding recorded in 2021 at $4.5 billion.
Yet, despite this momentum, the sector faces significant challenges.
Alexander underscores one of the biggest challenges for AI startups in the region: the gap between the demand and supply of talent.
This talent shortage not only slows down AI adoption but also puts companies in a constant race to attract and retain skilled professionals.
“Companies are under pressure to not only find the right skills but also meet nationalisation targets, which adds an extra layer of complexity to the hiring process. On top of that, companies adopting AI need to invest in change management — adjusting processes and preparing people to work alongside AI — because without this, the real benefits of AI adoption might never be realised,” he says.
Such concerns, however, present opportunities for improvement.
“On the flip side, the opportunities are massive. The Middle East is heavily investing in innovation, and governments are actively funding AI initiatives as part of their economic diversification goals,” he remarks.
For instance, Saudi Arabia recently launched a $100 billion AI initiative to boost its efforts in AI, data analytics, and advanced technology. The programme will focus on building data centres and supporting startups.
The region’s AI future
William shares the same sentiment, noting that MENA is on track to becoming a leading player in the globe.
“Regional governments have enacted favourable policies and incentives to attract foreign AI companies to expand their businesses there, and we are already seeing some early wins,” he explains, citing the expansion of Groq, a Silicon Valley-based AI company, in Saudi Arabia as an example.
“We also believe there will be sizable AI infrastructure projects across MENA that will help solidify the region’s leadership position in this area. We believe these are all tailwinds for regional AI startups to take advantage of this rapidly evolving tech ecosystem, as they are armed with local knowledge and are nimble enough to move quickly to develop and deploy AI solutions,” he further shares.
As attested by these developments and initiatives, the AI race is indeed on. And countries like the UAE and Saudi Arabia are going full throttle.
A more sophisticated AI-driven future is on the horizon — one characterised by better personalization, interaction, and security. With things far from slowing down, those at the forefront must be prepared for constant evolution.
“The only certainty we have is that things will only continue to evolve even faster in the coming years. As an early stage investor, we interact regularly with a strong pipeline of companies that are at the leading edge of technology, providing us with invaluable insights on the latest developments in the space. We believe the best strategy is to align ourselves with strong founders and entrepreneurs, and collaborate with them to build technology companies that drive meaningful change,” Williams emphasises.
For startups looking for a place to grow and scale, such a statement only proves that the region is a prime destination.
About the Authors
Emmy Borromeo is a writer and digital content strategist based in the Philippines. With a background in Economics from the University of the Philippines, she has written freelance for publications across the Middle East and the UK, covering business, economy, technology, and energy.
Anthon?Garcia?is an award-winning journalist and book editor based in Dubai, United Arab Emirates. He currently writes freelance for Economy Middle East, Energy and Utilities, Inc. Arabia and Cityscape Intelligence. He graduated with an AB English degree from the University of the Philippines and an MBA from Western Global University.?
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