How AI, data sovereignty and open source are redefining leadership in the Middle East

By 2030, artificial intelligence (AI) is expected to contribute $320 billion (Dh1.17 trillion) to the Middle East’s economy. Saudi Arabia will see AI add $135.2 billion to its GDP, while the UAE expects AI to account for 14 per cent of its total economic output.

While these numbers reflect impressive economic growth, they also illustrate a deliberate, region-wide pivot from oil dependency to a data-driven economy. Through frameworks such as Saudi Vision 2030 and the UAE’s smart city initiatives, Middle Eastern governments are laying the foundations for a future built on advanced technology and innovation.

But the Middle East’s transformation goes beyond a technological upgrade. It’s a reimagining of how data, governance, and agility intersect. Central to this effort are two guiding principles: data sovereignty and open source innovation, which ensure that the region’s systems remain resilient, scalable, and aligned with local priorities.

AI as a catalyst for regional transformation

AI is rapidly reshaping industries across the Middle East, with the manufacturing, public services, energy, and telecommunications sectors expected to see the most impressive gains. By 2030, AI is projected to contribute $246 billion across these key sectors, with adoption accelerating by up to 34 per cent annually.

Middle Eastern governments are embedding AI into critical systems to address complex challenges and drive economic diversification. In the UAE, smart city projects harness AI to optimise urban mobility and reduce emissions. Saudi Arabia, meanwhile, is deploying AI in healthcare and logistics to align with Vision 2030’s objectives to modernise essential services and reduce dependence on oil.

This isn’t just about adopting AI quickly; it’s also about adopting it wisely. “The Middle East is setting the standard for what responsible and transformative AI adoption looks like,” says Kevin Dallas, CEO at EDB, a leader in Postgres database solutions and AI-driven innovation. “It’s combining rapid deployment with robust governance that ensures transparency, accountability, and trust. That’s the blueprint for sustainable progress—not just in the region, but globally as well.”

Open source: A future-proof engine for scalability

Open source technology is transforming how organisations across the region build and scale digital infrastructure. By eliminating the constraints of proprietary platforms, open source empowers businesses to respond to regional challenges such as rapid urbanisation, resource optimisation, and financial inclusion.

A standout example is stc pay, Saudi Arabia’s leading digital wallet, which became the first enterprise in the region to host its core application on an open source database. With EDB Postgres AI, stc pay scaled from 700,000 users to 12 million in just two years, revolutionising financial access in the kingdom. By adopting open source with enterprise-grade expertise, stc pay built a high-performance, scalable platform that could evolve alongside user demand and regulatory requirements.

“Open source is ultimately a catalyst for collaboration and innovation on your terms,” explains Dallas. “It allows organisations to develop solutions that aren’t just scalable but are purpose built, whether for managing complex urban systems or creating inclusive financial ecosystems.”

The Middle East’s adoption of open source is also fostering innovation across public services, energy, and telecommunications. By building on adaptable platforms, governments and businesses alike are ensuring that the region’s digital infrastructure remains flexible and future-proof.

Data sovereignty: Building regional leadership

At the heart of the Middle East’s digital transformation is a commitment to data sovereignty—the principle that organisations retain full control over their data while ensuring compliance with local regulations. Frameworks such as Saudi Arabia’s Personal Data Protection Law (PDPL), with its strict requirements for data localisation and oversight of cross-border transfers, are setting new data governance benchmarks.

But data sovereignty goes beyond compliance. It also creates the conditions for organisations to confidently scale their operations. The Saudi Arabia Ministry of Tourism’s use of sovereign platforms to process and analyse vast datasets is a prime example. This approach helped the ministry exceed its Vision 2030 visitor targets an impressive seven years ahead of schedule, demonstrating how sovereignty enables operational clarity and strategic decision-making.

“Data sovereignty allows organisations to transform compliance into competitive advantage,” says Dallas. “When businesses have complete control over their data, they gain the confidence to innovate, scale, and build trust in rapidly growing markets.”

By embedding sovereignty into their systems, Middle Eastern governments and businesses are positioning themselves to lead in the global digital economy. These frameworks ensure that innovation aligns with long-term economic goals, creating resilient systems capable of meeting the demands of today while preparing for the challenges of tomorrow.

A blueprint for leadership in the digital age

“The Middle East isn’t just following the playbooks of Silicon Valley or Beijing,” explains Dallas. “It’s designing its own unique model of AI leadership where sovereignty, scalability, and innovation intersect.”

This approach reflects a broader truth: Success in AI isn’t about adopting the latest tools—it’s about aligning technology with values and long-term ambitions. The Middle East’s focus on trust, resilience, and adaptability is not only shaping its own growth but also setting a precedent for how emerging economies can lead on the global stage.

As AI adoption accelerates, the region’s strategy serves as a reminder that leadership requires more than technical expertise. It also demands a vision for how technology can transform industries while respecting local priorities. With its commitment to sovereignty and open source, the Middle East is creating a future in which digital innovation thrives on trust, adaptability, and collaboration.

– In association with EDB