The Gulf’s digital drive: The Middle East is emerging as the world’s next AI epicentre

Once considered a technology follower, the Middle East is rapidly redefining its role on the global stage, emerging as a powerhouse in artificial intelligence (AI). Driven by visionary policies, sovereign investment, and an unwavering commitment to data and compute sovereignty, Gulf nations are advancing AI far beyond experimentation into the core of national economies.

“Artificial intelligence is no longer experimental here,” says Avtar Sehmbi, member of the Forbes Technology Council and Fast Company Executive Board. Sehmbi, a global executive who has planned and executed large-scale transformations at HSBC, Deloitte, Cigna, and Verizon, believes the region is setting a precedent. “The Gulf is operationalising it at enterprise scale and anchoring it into national economic models. That combination is rare, even among developed markets.”

The momentum is rooted in top-down leadership. In 2017, the UAE became the first nation to appoint a Minister of State for Artificial Intelligence, launching the National AI Strategy 2031. Saudi Arabia swiftly followed, embedding AI within Vision 2030 and establishing the Saudi Data and Artificial Intelligence Authority (SDAIA).

“When AI becomes a national agenda item, not just a technology function, governance and funding align in a way that accelerates deployment,” Sehmbi explains.

A June 2025 Reuters report revealed the UAE’s Stargate project, one of the world’s largest AI compute campuses that will house more than 100,000 Nvidia GPUs. The five-gigawatt facility, led by G42 and US chipmakers, positions the UAE as a sovereign hyperscale compute leader.

While many regions rely on private sector innovation, the Gulf’s AI transformation is strategically state-backed. Saudi Arabia’s Public Investment Fund has committed over $40 billion to future technologies. Meanwhile, Abu Dhabi’s Mubadala is deploying $100 billion under its MGX platform to support AI, quantum computing, and biotech.

“Capital alone is not enough,” Sehmbi says. “Sustainable advantage comes from ecosystem design, governance maturity, and execution discipline. The Gulf is showing it understands all three.”

Global hyperscalers such as AWS, Google, and Microsoft have also established regional data centers to comply with data residency laws, while firms like G42 are engineering locally compliant compute platforms.

To secure long-term leadership, the region has built an AI talent pipeline unmatched anywhere in the world. Abu Dhabi’s Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) remains the world’s first graduate-level AI university, collaborating with MIT and Oxford to merge global academic expertise with local applications. Saudi Arabia’s National AI Training Program, developed with AWS and the PIF, aims to upskill 100,000 professionals by 2026.

“These are not just training schemes,” Sehmbi says. “They are capability-building mechanisms embedded into national strategies. Homegrown AI fluency is what ultimately separates sustained innovation from one-off pilots.”

Golden visas and fast-track licensing for AI ventures are further enabling both global talent and local entrepreneurs to co-develop the ecosystem.

While other markets remain in the pilot phase, Gulf nations are embedding AI into mission-critical systems. Dubai’s Electricity and Water Authority uses AI to optimize power distribution, while Saudi Arabia’s NEOM smart city deploys digital twin systems for urban planning and infrastructure risk management.

In healthcare, MBZUAI researchers have developed graph-based AI models for early Alzheimer’s detection, demonstrating applied AI’s impact on global health.

“These are not soft use cases,” Sehmbi emphasises. “These are mission-critical systems being rearchitected with AI. That tells us the Gulf is serious.”

A 2018 PwC report projected AI could add over $320 billion to Middle East GDP by 2030, with the UAE alone expecting AI to comprise nearly 14 per cent of national output.

Building Trust and Regulatory Readiness

Recognizing that innovation requires governance, regulators such as Abu Dhabi Global Market (ADGM) and Saudi Arabia’s SAMA are implementing sandbox frameworks for safe AI experimentation.

“Incorporating AI oversight at the board level is no longer optional,” Sehmbi adds. “If trust, auditability, and ethical clarity are not engineered from the start, the technology will never reach systemic scale.”

The Return of Global Talent

Perhaps the most telling signal of maturity is the return of top global technologists to the region. Senior leaders from London, New York, and Singapore are now spearheading national AI programs and enterprise transformations across the Gulf.

“They bring global playbooks, but they are grounded in local understanding,” Sehmbi notes. “That combination is going to define the region’s competitive edge.”

Artificial intelligence in the Middle East is no longer an emerging concept; it is a strategic operating model. Through sovereign infrastructure, bold policy, talent development, and massive investment, the Gulf is setting a new global standard.

As companies and investors evaluate where to build next-generation capabilities, Sehmbi is unequivocal: “The Gulf is not catching up. It is overtaking. And it is doing so with purpose.”

To learn more about Avtar Sehmbi’s background and perspectives, visit https://www.linkedin.com/in/avtarsehmbi/.