From energy to AI, the Middle East lines up $100 billion a year in investment, report finds

Dubai: The Middle East is lining up more than $100 billion a year in strategic investment by 2026, spanning oil and gas, renewables, healthcare, digital infrastructure and manufacturing, according to a new outlook from Grand View Research.

“The Middle East’s oil and gas sector remains a market anchor but the pace of technology adoption and export infrastructure expansion, particularly LNG, is what will define competitiveness into 2026,” said Swayam Dash, managing director at Grand View Research.

The UAE and Saudi Arabia remain key suppliers to global energy markets, and Grand View Research expects the region to keep investing heavily across upstream capacity and export infrastructure even as the energy transition advances.

The shift inside the sector is increasingly operational. National oil companies are rolling out digitalisation programmes using AI, IoT, drones and robotics to cut inspection time, improve maintenance planning and reduce costs. Carbon capture and storage projects are moving forward alongside early hydrogen initiatives.

Gas looks stronger than oil on the demand side. Grand View Research expects gas demand to continue rising into 2026, supported by power generation, industrial growth and LNG exports.

Solar and wind additions across the Gulf are accelerating, backed by auctions, long-term contracts and national targets. Costs continue to fall, which keeps solar competitive even in markets with access to low-cost gas.

Battery storage has shifted from a pilot technology to standard grid planning. Storage increasingly sits alongside new solar and wind projects, especially in the UAE and Saudi Arabia, where grid stability and peak demand management drive procurement.

“The breadth of renewable and storage investment across the UAE reflects a strategic pivot, not away from hydrocarbons, but toward a balanced, resilient energy mix,” said Dash.

Batteries extend value into peak periods, reduce curtailment, and improve reliability. That changes the economics of new capacity and strengthens energy security narratives that resonate with policymakers and industry.

Digital infrastructure is emerging as one of the most capital-intensive growth themes across the GCC, driven by cloud migration, AI workloads, government digitisation and new enterprise demand.

The data shows the Middle East and Africa data centre market is expected to grow at an 11.7% CAGR from 2025 to 2030. Cloud growth is even faster. Grand View Research projects that the Middle East and Africa cloud computing market will grow at an 18.3% CAGR from 2025 to 2030.

The UAE and Saudi Arabia are positioned as the two primary magnets for capacity expansion, supported by hyperscaler partnerships, public-sector cloud mandates, fintech growth, and AI programmes that require high-availability compute close to end users.

Dash said the stakes run beyond connectivity. “Cloud and data centre growth in the UAE is not merely about connectivity, it’s about enabling digital government services, fintech ecosystems and AI adoption that redefines competitiveness,” he said.

A second issue is emerging in procurement conversations - Energy use. New data centre capacity raises questions around power sourcing, cooling, water use and grid constraints. The region’s AI ambitions make sustainable data centre infrastructure a commercial necessity, not a branding exercise. Power costs and reliability feed directly into operating margins and uptime.

Healthcare is shifting from a public spending line item to an economic development sector, especially in the UAE and Saudi Arabia, where policy frameworks increasingly support private participation, speciality services and technology-enabled care delivery.

Dubai’s medical tourism numbers underline the economic spillover. The city hosted more than 690,000 medical tourists in 2023, contributing over Dh1 billion in healthcare revenues and supporting travel, hospitality and related services.

Digital health is also becoming infrastructure. UAE programmes linking national and emirate-level health record systems are pushing interoperability across thousands of facilities and large-scale datasets. As procurement scales, demand rises for AI-enabled diagnostics, virtual care platforms and integrated patient journeys that can reduce cost per episode and improve capacity utilisation.

Hydrocarbon advantage still anchors chemicals and bulk materials, but global overcapacity and tightening standards are pushing regional producers to upgrade. The direction of travel is higher-value derivatives, integrated refining and petrochemical complexes, and sustainability-linked materials such as lower-carbon steel, advanced composites and circular plastics initiatives.

Industrial strategies in the UAE and Saudi Arabia also continue to pull capital into localisation, advanced manufacturing, and supply chain resilience. Automation, digital twins, predictive maintenance and robotics remain central themes across new industrial parks and special economic zones.

Energy investment shapes utility pricing, reliability and the pace of electric mobility infrastructure. Renewables and storage influence long-run electricity costs and how quickly grids can absorb higher demand from cooling, industry and AI. Data centres and cloud spending affect the digital services consumers rely on daily, from payments and government portals to banking apps and healthcare access.

Healthcare investment shapes waiting times, speciality availability, insurance product design and cross-border care choices. Industrial investment influences job creation, wages and price stability in essential goods.

The Research’s central argument is that the region is entering 2026 with a diversified capital pipeline, anchored by hydrocarbons but increasingly defined by the build-out of clean power, digital infrastructure and investable healthcare ecosystems.

Projects that manage cost, timelines, regulation and workforce capability will attract the next wave of capital. Those that do not will struggle, even in a market flush with ambition.