The UAE secures future growth engines with its national AI strategy.
Accelerating global corporate collaboration and large-scale infrastructure investment, centered on state-owned AI companies.
Key policies
The UAE announced its goal of becoming a global leader in artificial intelligence through the 'UAE National AI Strategy 2031' announced in 2017.
[Source: ai.gov.ae]
As of 2025, AI and digital industries will account for approximately 12% of non-oil GDP, and this figure is projected to increase to 20% by 2030. Notably, the government predicts that AI alone could generate 13.6% of the UAE's total GDP by 2030. The UAE government is expanding the application of AI to public sectors such as healthcare, education, transportation, government services, and the environment, while establishing a regulatory framework for data infrastructure and personal information and ethics guidelines. The UAE has become the first country in the world to appoint a Minister of Artificial Intelligence and establish a relevant ministry. The UAE plans to adopt AI and digital industries as core national policy agendas in 2026 and actively pursue related industrial policies.
To achieve these goals, the Abu Dhabi government announced a strategic investment of approximately $35 billion in AI and digitalization from 2025 to 2027. This is seen as a move to accelerate the creation of a national AI ecosystem, including data centers, cloud infrastructure, and digital administrative services.
Furthermore, the UAE's financial capacity secured in a high oil price environment and its low-cost power system based on nuclear and solar power provide a structurally advantageous foundation for operating AI data centers. These conditions are expected to lower AI operating costs and strengthen investment incentives for global companies. The UAE's AI and digital industry strategy is directly linked to the national vision of diversifying the economy and securing future growth engines, and is expected to expand cooperation with global technology companies.
Status of major companies
The UAE's AI industry is largely centered around Abu Dhabi-based tech giant G42. G42 is a conglomerate specializing in artificial intelligence, cloud computing, and big data technologies, with various subsidiaries including AIQ, Core42, Pressight, Khazna Data Centers, and Space42.
In particular, AIQ, a specialized energy AI company jointly established with ADNOC (National Oil Company), supports precision oil and gas exploration and operational optimization. Core42 is responsible for building a national AI and cloud infrastructure, and Presight provides AI analytics solutions based on its large-scale data analytics platform (TAQ). Khazna Data Centers, the largest data center in the Middle East, holds approximately 70% of the UAE data center market and provides high-performance computing infrastructure.
Space42, a space tech company combining satellite information and AI, is expanding into space-based autonomous driving, including signing a contract to supply HD maps for GM's autonomous driving system by 2025. M42 is driving innovation in healthcare by developing precision medicine solutions that combine AI and clinical medicine.
Global companies are also entering the UAE or expanding partnerships. In April 2024, Microsoft made a strategic investment of $15 billion in G42 and co-created a $1 billion fund to support UAE startups. Private companies in Dubai, such as Arabtec and Astra Tech, are also participating in AI research and development, and public institutions such as the Dubai Digital Authority are actively pursuing AI projects.
Latest technology trends
The UAE's AI industry is currently undergoing various innovations, including the construction of large-scale computing infrastructure, the development of cutting-edge models, the expansion of autonomous driving, and the application of precision medicine. The construction of large-scale data centers is particularly active. Recently, the UAE announced the "Stargate UAE" large-scale AI data center project, a joint venture between du Telecom and Microsoft. This plan, which will begin with a first phase of 200MW in 2026 and expand to a total of 5GW, aims to secure large-scale GPUs, power, and land. Khazna in Abu Dhabi is also building additional data centers, and the government is supporting future expansion plans for hundreds of megawatts of data centers. In September of this year, TII, a research institute in Abu Dhabi, partnered with NVIDIA to open the Middle East's first NVIDIA AI Tech Center. Through this collaboration, TII will secure cutting-edge hardware, including next-generation GPUs ("Thor" chips), to accelerate AI model research and robotics development.
In the AI model field, examples have emerged that focus on model lightweighting and strengthening logical reasoning. In September, the Mohammed bin Zayed University for AI (MBZUAI) and G42 unveiled "K2 Think," a massive AI model with approximately 32 billion parameters. This model is a next-generation AI model designed to mimic human thought processes and perform complex reasoning and language understanding. Despite being 20 times smaller than massive models like GPT-4, it outperforms them in mathematical reasoning performance and other areas, and has been released globally as open source. Thus, the UAE, led by MBZUAI and G42, has successfully developed small-scale, high-efficiency models, demonstrating innovative AI competitiveness that transcends the "bigger is better" ideology.
The autonomous driving sector is also notable. Dubai has established a strategy to transition 25% of all transportation to autonomous driving by 2030. Cruise autonomous vehicles are currently undergoing pilot operations, and autonomous taxi services within the city are slated to expand gradually starting this year. Satellite AI company Space42 is using aerial photography and LiDAR data to create high-precision maps for GM's Super Cruise. This map data is playing a key role in implementing an autonomous driving system tailored to the UAE's driving environment.
AI in healthcare is also rapidly expanding. UAE hospitals are adopting technologies such as AI-based image analysis, robotic surgery, and remote diagnosis. King's College Hospital Dubai and others are using AI modules to detect suspected cancerous areas in real-time in endoscopic images, and in operating rooms, AI monitors procedures and immediately alerts patients to any abnormalities. The Abu Dhabi government's established medical infrastructure, including the Malaffi electronic medical record system, facilitates the expansion of medical data-based AI services.
Key Issues
As of September, key issues in the UAE's AI industry included strengthening global cooperation, foreign policy, and the speed of policy implementation. In September 2025, the UAE President met with the CEO of OpenAI in Abu Dhabi to discuss research collaboration with OpenAI, actively seeking collaboration with international technology companies. This is expected to lead to stronger cooperation with the United States to secure high-performance AI infrastructure. Indeed, during President Trump's visit in 2025, the UAE agreed to build the world's largest AI campus in partnership with US companies. However, some data center projects have been delayed due to concerns about relations with China.
Furthermore, the UAE Media Council warned that unauthorized creation of national flag or official images using AI, or the dissemination of false information, could be punishable as a violation of media law. This demonstrates the government's commitment to rigorous action against the spread of AI-based fake news and deepfakes. Meanwhile, the government is accelerating policy implementation, including the establishment of the AIATC in Abu Dhabi in 2024, the launch of Dubai's AI Blueprint initiative, and AI training for civil servants (3 people trained by 2025, with 95% participation).
market size
The UAE's overall AI market is expected to grow 8.8-fold, from $486.5 million in 2020 to $4.2851 billion in 2030. With an average annual growth rate of over 25%, AI adoption in both the public and private sectors, particularly in Dubai and Abu Dhabi, is expected to accelerate, entering a period of explosive growth after 2025. Specifically, the market size is estimated at $1.257 billion in 2025 and is expected to more than triple by 2030.
As the AI market rapidly grows, demand for services such as operations, system integration, security, and compliance is also rapidly increasing, keeping pace with the adoption of computational infrastructure like data centers and GPUs. The market is entering a period of full-scale expansion, with the transition from simple infrastructure construction to real-world application and expanded operational scope. Consequently, the scale of contracts between companies for AI infrastructure construction, cloud services, data center management, system integration (SI), and operations management is expanding, and a clear trend is emerging of contract periods shifting from short-term projects to long-term service agreements lasting three to five years or more.
Investment Status
Over the past three years, the UAE has continued to invest heavily in AI at both the public and private levels. The Abu Dhabi government announced plans to invest approximately 13 billion dirhams (approximately $3.54 billion USD) in AI and digitalization strategies from 2025 to 2027, integrating AI across government services. In the private sector, Microsoft invested $15 billion in G42 in April 2024 and jointly established a $1 billion AI innovation fund. In 2025, telecommunications company du and Microsoft announced a collaboration to build the "Stargate UAE" data center, and G42's AIQ secured a three-year, $340 million contract from ADNOC to implement the energy exploration AI platform "ENERGYai." Furthermore, infrastructure investment is expanding, with the launch of the "AI Infrastructure Partnership" (AIP), involving the Abu Dhabi Investment Authority (ADIA), Mubarak, and global investors, raising $30 billion in funds.
Private companies have also made large-scale investments in overseas projects. For example, EDGNEX, a subsidiary of Dubai real estate company Damac, announced a $200 billion investment in building a data center in the United States in 2024. G42 is strengthening its global computing capabilities by signing a $1 million contract with Cerebras, a US-based AI supercomputing company, to build a supercomputer. Overall, the UAE is making significant investments in both AI infrastructure (data centers and networks) and R&D (models and solutions).
Representative items
The following three key representative items can be cited in the UAE AI industry.
1. AI server/supercomputer
High-performance servers are essential for data centers and AI workloads. Abu Dhabi's G42 is partnering with Cerebras Systems in the US to build the 8 exaFLOP AI supercomputer, Condor Galaxy 1, under a $1 million contract. This supercomputing system will be used for large-scale AI model training and research.
2. GPU and compute infrastructure for the cloud
The UAE is working closely with GPU manufacturers like NVIDIA and AMD to secure a GPU-based cloud platform. For example, the opening of the Abu Dhabi TII-NVIDIA Joint Research Center will allow for the introduction of cutting-edge GPUs, and duxMicrosoft's Stargate project plans to build a massive data center capable of accommodating millions of GPUs. Furthermore, G42 is developing a sovereign cloud based on Microsoft Azure to accelerate the transition to government services.
3. Autonomous driving software and map data
The UAE is also investing heavily in the development of autonomous driving systems. Space42 has signed a contract to develop its own satellite and LiDAR-based precision maps and provide them to GM's Super Cruise ADAS. High-precision maps, navigation software, and vehicle control algorithms that enable autonomous driving on roads are promising products. Furthermore, AI vehicle communications and autonomous driving tuning software are also seeing growing market demand.
In addition, precision medical equipment, software, and AI security solutions are also attracting attention as key items.
SWOT analysis
The UAE's AI industry benefits from robust government support and infrastructure. The government is actively pursuing policies, investing billions of dollars. A stable investment environment, low-cost electricity, and free zones are all favorable factors for data centers and cloud businesses. Dubai and Abu Dhabi's advanced telecommunications networks and the high market share of private data centers also support the country's competitiveness. Furthermore, the UAE is continuously fostering AI experts through the establishment of MBZUAI and through training programs for civil servants.
On the other hand, weaknesses include a small domestic market and a reliance on foreign technology. The small population limits the market itself, and compared to the US and China, research and development capabilities are still in their infancy. While personal information protection laws and AI ethics guidelines have been introduced, regulatory uncertainty remains as implementation is still in its early stages. Furthermore, most core hardware, such as chips and servers, relies on imports.
Opportunities include rapid market growth and demand for digital transformation across industries. The AI market is growing at an average annual rate of over 40%, and AI adoption is active across various industries, including energy, logistics, finance, and education. Demand from state-owned energy companies is particularly strong, fostering greater collaboration opportunities. Government projects and foreign business-friendly policies (such as visas for skilled workers and free zone systems) also improve entry conditions.
Threats include global technological competition and tightening regulations. The US and Europe are tightening security and ethics standards and restricting technology transfer. Within the Middle East, large-scale investments from rivals like Saudi Arabia are also a burden. Internally, the UAE is strengthening regulations to prevent AI misuse, which could restrict corporate activities. Furthermore, the incompleteness of AI systems and security threats pose major risks.
Promising field
The following are promising sectors and opportunities for our company to enter the UAE AI market.
1. Energy and Resources
The UAE, one of the world's largest oil producers, is actively adopting AI in oil and gas exploration and production. State-owned energy companies such as ADNOC and TAQA are pursuing AI-based resource management and drilling optimization through joint ventures like AIQ. Consequently, demand for precision exploration algorithms, predictive maintenance solutions, and smart energy management systems in the oil and gas sector is growing. Korea, with its experience integrating AI technologies with energy companies like SK and GS Energy, can provide solutions that align with the UAE's low-carbon and digital transformation strategies.
2. Smart Mobility and Autonomous Driving
Dubai's autonomous transportation strategy aims to automate 25% of transportation by 2030. Currently, the UAE is in the pilot phase, including testing Cruise autonomous taxis. Demand is growing for high-precision maps, ADAS software, and integrated autonomous driving system solutions. Just as Space42 supplied HD maps for GM's autonomous driving, Korea's autonomous driving technology (high-precision maps, sensor fusion, and control software) is well-suited to the UAE's smart transportation infrastructure. Furthermore, drone and robot logistics, as well as smart city traffic control, are also growing, presenting significant opportunities for companies with autonomous driving experience, such as Hyundai Motor Company and KT.
3. Precision Medicine and Digital Healthcare
The UAE emphasizes the use of AI to improve public health. The foundation is in place, with initiatives like the Abu Dhabi Electronic Health Information Exchange (Malaffi) and standardization of electronic records across all UAE medical institutions. Furthermore, medical conferences like WHX Dubai highlight the growing demand for AI equipment and software. Korea's medical AI technologies, including AI imaging diagnosis, robotic surgery, and telemedicine systems, are aligned with the UAE's healthcare remodeling needs. There are significant opportunities for cooperation, particularly in areas like aging and chronic disease management, and smart hospital operation solutions.
4. Data Center/Cloud Infrastructure
The UAE is making a conscious effort to build data centers capable of handling large-scale AI workloads. New data center sites are continuously being supplied in Dubai and Abu Dhabi, with expansions underway at du, G42, and Khazna. Korean companies have extensive experience building servers, storage equipment, and cloud platforms. In particular, Korean companies' server solutions, FPGAs, AI accelerators, and data center cooling technologies are well-suited to the UAE's scale-out infrastructure needs. Furthermore, there are opportunities to participate in international projects, such as the Saudi-UAE AI Infrastructure Partnership (AIP).
5. Smart City/IoT
Dubai and Abu Dhabi are currently implementing pilot city projects, including Smart Dubai. They are encouraging the adoption of AI-based solutions in areas such as transportation ITS, public safety, smart energy management, and disaster monitoring. Examples include AI video security systems, traffic prediction algorithms, and smart grid solutions. Korea, with its world-class experience in smart cities (e.g., Incheon Songdo) and IoT solutions, offers numerous opportunities for collaboration, incorporating smart city initiatives (e.g., Dubai's urban plan "D33") at the policy level.
6. EdTech and Human Resources Development
The UAE is actively seeking to secure AI talent. In addition to MBZUAI, the country is promoting digital education programs (such as AI Education Week in Schools) and has established a global AI expert visa. Korea's AI education solutions, AI learning content, and remote learning platforms align with the UAE's talent development policies. Furthermore, the development of customized AI tutors tailored to the UAE's English and Arabic language education needs is promising.
It's crucial to develop a market entry strategy by carefully understanding the UAE government's AI promotion policies and demand across various sectors. For example, in the energy sector, consider joining a joint venture with ADNOC and its partners. In the mobility sector, consider partnerships with the Dubai Digital Transport Authority or local mobility startups. In the healthcare sector, consider collaborating with the state-run healthcare system (e.g., MUHSA) to enter the smart hospital business. In the education sector, consider participating in a project to establish an AI campus within the UAE. Overall, it's crucial to capitalize on the UAE's significant government investment and deregulatory policies (e.g., zones allowing 100% foreign investment) to seize market opportunities.
Source: Official UAE government data, Statista, local media and research reports, and KOTRA Dubai Trade Center data.