Artificial intelligence (AI) is rapidly reshaping economies across the Middle East, particularly within the Gulf Cooperation Council (GCC). By 2030, AI could contribute as much as $320 billion to the region’s gross domestic product (GDP), transforming how governments operate and how businesses innovate. This technological advancement signals a significant shift for oil-rich economies, providing a credible avenue for diversification and productivity improvement.
Leading the Charge: Saudi Arabia and the UAE
The push for AI development is largely driven by two nations: Saudi Arabia and the United Arab Emirates (UAE). Saudi Arabia is projected to gain up to $235 billion in GDP from AI by 2030, representing about 12.4% of its economy. The UAE, on the other hand, could see AI contribute nearly 14% of its GDP, or around $96 billion.
Saudi Arabia has positioned AI as a national priority under its Vision 2030 economic reform plan. The Saudi Data and AI Authority is spearheading initiatives that improve energy optimization, logistics, urban planning, and government services. The overarching goal is to attract investment, create high-skilled jobs, and lessen reliance on hydrocarbons.
In contrast, the UAE is focusing on the speed of AI integration rather than sheer scale. The country’s National AI Strategy 2031 aims to leverage AI for growth in non-oil sectors, utilizing public services as testing grounds for innovative technologies.
The Rise of Generative AI
The advent of generative AI has elevated expectations for efficiency across various sectors. Tools that can write code, analyse data, and produce content promise to reduce costs while enhancing output. For GCC economies, this translates to an additional $21–35 billion in annual non-oil GDP. This anticipated growth explains the region’s increasing AI investments, which could reach $7.2 billion in 2023 alone.
As the focus shifts from pilot projects to systems that deliver tangible productivity gains, the emphasis on robust infrastructure becomes crucial. AI requires substantial power, data, and computational resources, prompting GCC nations to commit over $100 billion annually to AI infrastructure development, supported by sovereign wealth funds capable of long-term investments.
Saudi Arabia has announced significant commitments to enhance its AI capabilities, including the construction of data centres and energy supply networks. Meanwhile, the UAE is developing hyperscale computing infrastructure, collaborating with partners like OpenAI and NVIDIA to create an AI cluster with a power capacity of 1GW. Global cloud providers are also establishing new data centres in the UAE, facilitating secure and low-latency AI deployment for both government and business sectors.
The real-world impact of AI is most tangible in daily life. In healthcare, AI algorithms support diagnostics and enhance hospital operations. Financial technology sectors benefit from improved fraud detection and customer personalization, while government processes related to visas, licenses, and municipal services are expedited through AI integration. The robust digital infrastructure, including a 5G network that covers more than 90% of the population in many GCC areas, enables these real-time applications.
Despite the progress, challenges remain. The availability of skilled talent poses a significant bottleneck. The demand for AI engineers and data scientists surpasses the current supply. In response, Saudi Arabia aims to elevate the AI and data skills of 20,000 citizens, while the UAE seeks to attract international talent through grants and long-term visa programs.
Regulatory frameworks also play a critical role in shaping the AI landscape. Governments need to establish policies that foster public trust concerning data handling, privacy, and ethical AI practices. As the region moves quickly towards AI adoption, ensuring consistency in regulations will be vital for sustaining long-term growth.
AI is not a cure-all, but it has become integral to how Middle Eastern economies envision their futures. For both Saudi Arabia and the UAE, AI represents a tangible pathway to a post-oil economy. With sustained investment, skills development, and effective governance, AI has the potential to redefine the region’s economic identity over the next decade.
