Abundant capital and favorable regulations make the Gulf state an attractive option for AI companies.
The UAE is on a path to becoming a global leader in AI, looking to attract outside investors while also increasing its use internally. In April, Dubai’s Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum unveiled the Dubai Artificial Intelligence Universal Blueprint, a plan aimed at improving business productivity by 50% and growing the economy by $27 billion through the use of AI. Last month, the Dubai Artificial Intelligence Centre opened with the mission to help government entities make better use of AI.
The UAE is quickly becoming a hub for technology innovation, and that includes AI and blockchain companies. The government here is very forward-thinking and has invested heavily in tech infrastructure, as well as favorable regulations and initiatives aimed at attracting tech talent and fostering a favorable environment for startups.
“The UAE is quickly becoming a hub for tech innovation, and that’s true for AI and blockchain companies,” Raghav Rezy Jealous, founder and CEO of Dubai-based tech company Hydro Online, told The Media Line. “The government here is very forward-thinking and has invested heavily in tech infrastructure, as well as favorable regulations and initiatives aimed at attracting tech talent and fostering a favorable environment for startups.”
He noted that entrepreneurs have access to advanced data centers, high-speed internet and a strong legal framework that supports digital innovation.
Companies in the UAE and abroad are investing heavily in AI, which has the potential to transform various business sectors.
AI advisor Martin de Jongh told The Media Line that using AI to handle customer interactions could one day be 20 to 50 times cheaper than traditional customer service methods. Brazilian banking company Nubank is starting to use AI for that purpose, he said.
“This will free up employees to focus on more complex activities, leading to significant cost savings and operational efficiency,” he explained. “The increased use of large language models will drive optimization across industries, forcing companies to adapt to stay competitive.”
Isabella Williamson, founder of Dubai-based AI consulting group Tyde.AI, told The Media Line that she has noticed high demand from UAE companies for guidance on using AI. The company she founded in April has worked with Dubai-based marketing firms ActiveDMC and Edelman, as well as the UAE’s state investment firm Mubadala.
What’s really needed is affordable AI consulting to help companies future-proof their talent, technology, and operations against advances in generative AI.
“What’s really needed is affordable AI consulting to help companies future-proof their people, technology and operations against advances in generative AI,” Williamson said.
The UAE is looking to use its vast capital to become a pioneer in AI, and the country, particularly Abu Dhabi’s sovereign wealth fund, is trying to lure AI investors to set up shop in the UAE. Funding is tough for venture capital investors, so many are flocking to places like the UAE and Saudi Arabia, analysts say.
“One US-based venture capital investor famously described the Four Seasons in Riyadh as ‘basically Palo Alto,'” an AI investor who asked not to be named told The Media Line. “The same could be said about Abu Dhabi, where many big-name funds have launched in the past.”
Analysts say investing in AI will require significant capital investment from infrastructure startups in the form of chips to train the models.
Globally, the AI race is heating up, with major players such as Microsoft, Google, Meta, X and French company Mistral making great strides.
In April, Microsoft announced a $1.5 billion investment in G42, a leading UAE AI technology company. G42 is chaired by Sheikh Tahnoun bin Zayed Al Nahyan, UAE national security adviser and brother of UAE President Mohammed bin Zayed Al Nahyan. Bloomberg and The New York Times reported that the deal was signed after G42 agreed to end its partnership with China and start using U.S. technology.
Omar Al Olama, the UAE’s minister of state for artificial intelligence, recently told French news agency AFP that the UAE is moving away from China and is “fully aligned” with the US on AI development. “There will be a lot of discussions between the UAE and the US about what we are comfortable with and what we are not comfortable with with the rest of the world,” he told AFP.