Courting Investors, UAE Aims To Become AI Powerhouse
Vast available capital along with favorable regulations have made the Gulf country an appealing option for AI companies
The United Arab Emirates is on the path to becoming a global leader in the field of artificial intelligence, aiming to court outside investors while also increasing internal AI use. In April, Crown Prince of Dubai Sheikh Hamdan bin Mohammed Al Maktoum launched the Dubai Universal Blueprint for Artificial Intelligence, a plan meant to increase business productivity by 50% and grow the economy by $27 billion through the use of AI. Just last month, the Dubai Center for Artificial Intelligence opened with the mission of helping government departments successfully use AI.
The UAE is rapidly becoming a hub for tech innovation, and that’s true for AI and blockchain companies alike. The government here is very forward-thinking and has made significant investments in technology infrastructure. There are also favorable regulations and initiatives aimed at attracting tech talent and fostering a conducive environment for startups.
“The UAE is rapidly becoming a hub for tech innovation, and that’s true for AI and blockchain companies alike,” Raghav Reggie Jerath, founder and CEO of the Dubai-based tech company Hydro Online, told The Media Line. “The government here is very forward-thinking and has made significant investments in technology infrastructure. There are also favorable regulations and initiatives aimed at attracting tech talent and fostering a conducive 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 within and outside the UAE are investing heavily in AI due to its transformative potential across various business sectors.
AI adviser Martijn de Jong told The Media Line that using AI to deal with clients could one day be 20 to 50 times cheaper than traditional methods of servicing clients. The Brazilian banking company Nubank has started using AI for that purpose, he said.
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“This allows employees to focus on more complex activities, leading to significant cost savings and increased operational efficiency,” he explained. “The growing use of large language models drives optimization across industries, compelling companies to adapt to stay competitive.”
Isabella Williamson, founder of the Dubai-based AI consulting group Tyde.AI, told The Media Line that she noticed a high demand for guidance on AI usage from businesses in the UAE. Her firm, which she founded in April, has worked with the Dubai-based marketing agencies Active DMC and Edelman and for Mubadala, one of the UAE’s state-owned investment companies.
The real need is for affordable AI consultancy that helps businesses future-proof their people, technology, and operations against generative AI advancements.
“The real need is for affordable AI consultancy that helps businesses future-proof their people, technology, and operations against generative AI advancements,” Williamson said.
The UAE aims to use its vast capital to become a frontrunner in AI. Sovereign wealth funds in the country, especially in Abu Dhabi, are trying to woo AI investors to set up shop in the UAE. Since fundraising has been tough for venture capital investors, many are flocking to places like the UAE and Saudi Arabia, analysts said.
“One US-based venture capital investor famously called the Four Seasons in Riyadh ‘basically Palo Alto,’” an AI investor who requested to remain anonymous told The Media Line. “The same can be said for Abu Dhabi, where many well-known funds have set up thus far.”
Analysts say that investing in AI requires significant capital expenditures by infrastructure startups in the form of chips to train their models.
Globally, competition in AI is intensifying, with major players like Microsoft, Google, Meta, X, and the French company Mistral making significant strides.
In April, Microsoft announced a $1.5 billion investment in G42, the UAE’s leading AI technology company. G42 is chaired by Tahnoun bin Zayed Al Nahyan, UAE national security adviser and brother to UAE President Mohamed bin Zayed Al Nahyan. The deal was signed after G42 agreed to drop Chinese partnerships and begin using American technology, Bloomberg and The New York Times reported.
UAE Minister of State for Artificial Intelligence Omar Al Olama recently told the French news agency AFP that the UAE is shifting away from China and is in “complete alignment” with the US regarding AI development. “There are going to be a lot of discussions between the UAE and the US about what they are comfortable with other players around the world and what they aren’t,” he told AFP.
