Saudi Arabia and the United Arab Emirates are becoming pioneers in the Middle East’s transition from oil dependency to investments in cutting-edge artificial intelligence (AI) as the region navigates a significant economic revolution. With their bold AI plans, these two countries are not only changing their economic and social environments and striving to mitigate climate change, they are also establishing standards for the whole region.
Strong commitment to AI development
Saudi Arabia is moving in the right direction to dominate the world in artificial intelligence. The kingdom’s dedication to technological innovation and economic diversification was emphasized in its Vision 2030. The year 2018 marked a turning point in this shift as Saudi Arabia gave US$45 billion to SoftBank’s Vision Fund which focused mainly on artificial intelligence and supported well-known tech firms like Arm, Automation Anywhere, Cruise, and Nvidia. According to a PwC analysis, by 2030, the Middle East could reap 2% of AI’s overall global advantages, totaling around US$320 billion.
Dr. Mohamed Fouad, Vice Chairman of COPC Global Consulting, observed that Saudi Arabia’s investment in AI and technology is a reflection of its wider aim of economic diversification and innovation, “the monarchy is becoming more than just an investor in the global tech sector.”
Commenting on the government’s recent announcement of an additional US$1 billion investment into the Gaia ecosystem and the establishment of a US$100 million fund to assist local AI businesses, Dr. Fouad told DevelopmentAid,
“The recent funding announcements are a clear indication of Saudi Arabia’s intent to support both local innovations and international technology companies.”
Meanwhile, to ensure a stable energy base for the development of AI technologies, Abu Dhabi intends to expand its gas-fired power plants by constructing five thousand megawatts (MW) of new capacity. This project is crucial to supporting the UAE’s national AI plan. As well as improving energy reliability, the additional capacity will lay the groundwork for the adoption of AI-driven solutions in sectors such as healthcare, education, and smart cities.
AI and sustainable development
In education, Saudi Arabia is leveraging AI to equip the next generation with vital skills. The “Artificial Intelligence Hour,” launched in 2023, aims to introduce over 300,000 high school students to AI and large language models. Supported by King Abdulaziz and his Companions Foundation for Giftedness and Creativity, the initiative is part of a broader national strategy to foster AI talent. This is bolstered by the country’s US$40 billion AI investment fund, reflecting the Public Investment Fund’s commitment to integrating AI across various sectors including education.
A McKinsey & Co. analysis predicts that by 2030, AI could unlock between US$15 and US$27 billion in economic value for Saudi Arabia’s healthcare sector by automating up to 40% of tasks. This would significantly improve efficiency and reduce manual workloads, a central goal of the Ministry of Health’s Vision 2030 strategy. The SEHA Virtual Hospital, supported by Proximie’s AI platform, exemplifies this shift by offering remote medical care and overcoming geographical barriers. AI technologies used at the hospital are expected to treat over 400,000 patients annually by triaging caseloads and providing remote imaging interpretation.
The Department of Health in Abu Dhabi is taking a major step toward improving public health outcomes by implementing AI through programs such as the Personalised Precision Medicine Programme which employs powerful AI technologies to achieve better cancer detection and therapy.
The CEO and founder of KEMET, an AI startup in Saudi Arabia and UAE, Abdo Farouk Elkattan, told DevelopmentAid that Saudi Arabia is using AI to improve desalination processes in response to the increasing scarcity of water. This technique aims to make desalination more cost-effective and environmentally friendly to address a pressing local need, he added.
Elkattan explained that the UAE is heavily investing in AI across multiple industries, such as banking and healthcare. Meanwhile, the Mohammed bin Zayed AI Center is dedicated to creating AI that facilitates improved collaboration between public and private entities.
The UAE’s support for entrepreneurs and technical breakthroughs is essential to achieving its objective of having a diverse and sustainable economy, he added.
AI to fuel economic development
AI has significant economic ramifications for the Middle East. PwC has estimated that by 2030, AI could boost the local economy by up to US$320 billion. This forecast highlights how AI can revolutionize several industries. It is anticipated that Saudi Arabia will benefit the most, with an estimated US$135.2 billion in economic impact by 2030. By 2030, AI is expected to contribute around 14% of the UAE’s GDP, making it the country with the largest proportional influence. Furthermore, it is projected that AI will contribute 20–34% more to the region each year, highlighting its significance as a key driver of economic expansion.
In addition to investing in technology, the UAE and Saudi Arabia are influencing the direction of the Middle East’s economy. Their strategic aim for economic diversification and growth is reflected in their investments in AI, which are setting new benchmarks for the area. The Gulf states are developing data centers and technology infrastructure by making full use of their resources which include cheap electricity and an abundance of land. Alongside this change, there have also been large investments in the upgrading of public services, the introduction of 5G, and improved digital services.
