The United Arab Emirates (UAE) is leading the way in the shift towards artificial intelligence (AI) in the Gulf region, thanks to substantial investments in infrastructure and advanced technologies, positioning itself as a key regional hub in this field.
A recent study by McKinsey titled “The State of AI in GCC Countries,” which was accessed by our publication, highlights that the UAE, through the company G42, has announced a series of international partnerships aimed at enhancing its AI capabilities. A notable initiative was the launch of a global alliance called “UAE Stargate” in May 2025, aspiring to establish the country as a pivotal player in the global AI industry.
While the report indicates a surge in investment and strategic direction, it also points out that many organizations in the Gulf region are still at the experimental stage.
Ambitious Path
A significant majority of executive leaders in the region have shown a commitment to expanding technology use and increasing their budgets. However, the direct economic benefits remain limited. The study reveals that only 11% of Gulf organizations can currently link more than 5% of their profits to the utilization of AI.
The region is on an ambitious path to becoming a global AI center, with Gulf Cooperation Council (GCC) countries investing billions of dollars into data centers and technological infrastructure.
In Saudi Arabia, the company Human is collaborating with Nvidia to establish large “AI Centers,” while Qatar has launched a five-year program with the American firm Scale AI to broaden AI usage within the government sector.
The findings from McKinsey’s report indicate that by 2025, 84% of Gulf organizations will have adopted AI in at least one of their functions, up from 62% in 2023. However, only one-third of these organizations have progressed beyond the experimental phase to broader applications.
The report suggests that successfully transforming these investments into sustainable economic value requires aligning AI with business objectives, developing local talent, constructing flexible data infrastructure, and fostering a culture of change within organizations.
With an increase in government and sector initiatives in the UAE, Saudi Arabia, and Qatar, the Gulf region appears poised for a new phase of transformation, focusing not only on infrastructure and technical trials but also on generating tangible economic returns that solidify the Gulf’s stature as a global hub for the AI industry.