AI anchors economic diversification across GCC economies
Saudi Arabia and the UAE lead with scale, speed, and capital
Infrastructure, talent, and regulation will decide long-term impact
Artificial intelligence is no longer an abstract promise in the Middle East. It is becoming part of how economies work, how governments deliver services, and how countries imagine life after oil. Across the Gulf Cooperation Council (GCC), AI has moved from strategy documents into budgets, infrastructure, and everyday systems.
By 2030, AI could add as much as $320 billion to the region’s GDP. That headline number often grabs attention, but the deeper shift matters more. For oil-rich economies, AI offers something rare: a credible engine for diversification that improves productivity while creating new industries.
Two countries dominate the regional conversation. Saudi Arabia is projected to gain up to $235 billion in GDP from AI by 2030, about 12.4% of its economy. The United Arab Emirates could see AI account for nearly 14% of GDP, roughly $96 billion.
Saudi Arabia treats AI as a national project. Vision 2030 places data and intelligence at the heart of economic reform. Through the Saudi Data and AI Authority, AI now shapes energy optimisation, logistics, urban planning, and government services. The ambition is straightforward: attract investment, create high-skilled jobs, and reduce dependence on hydrocarbons.
The UAE takes a different path. It focuses less on scale and more on speed. AI already runs through healthcare systems, transport networks, and government platforms. The country’s National AI Strategy 2031 targets AI-driven growth in non-oil sectors, turning public services into testbeds for new technology.
Generative AI has raised expectations almost overnight. Tools that write code, analyse data, and generate content promise to cut costs while boosting output. For GCC economies, that translates into $21–35 billion a year in additional non-oil GDP.
This explains why AI spending keeps rising. Regional investment could reach $7.2 billion this year. The focus has shifted from pilots and proofs of concept to systems that deliver measurable gains in productivity and efficiency.
AI needs power, data, and compute. The Middle East has decided to build all three at scale. GCC countries plan to invest more than $100 billion a year in AI-related infrastructure, backed by sovereign wealth funds that can afford long timelines.
Saudi Arabia has signalled vast, long-term commitments to AI capacity, including data centres and energy supply. The UAE is constructing hyperscale compute infrastructure, which consists of an AI cluster of 1GW power with partners like OpenAI and NVIDIA.
The main actors in the scenario are the global cloud providers, who are opening up new data centres in the UAE and providing secure and low-latency AI deployment to government and business sectors at the same time.
The real test of AI lies in daily life. In healthcare, algorithms support diagnostics and hospital operations. AI integrates into fintech for better detection of fraud and customer personalisation. On the other hand, it is applied in the government sector to allow faster completion of the processes concerning visas, licences, and municipal services.
The strong digital infrastructure is a major facilitator of this. The 5G network has already covered more than 90% of the population in most parts of the GCC, thus allowing real-time applications. The startup hubs in Riyadh, Dubai, and Abu Dhabi, which are the three major cities of the region, are still thriving with the backing of funds, accelerators, and soft regulations.
The availability of talent is still the biggest bottleneck. The need for AI engineers and data scientists is much higher than their number. Saudi Arabia intends to upgrade the AI and data skills of 20,000 people from amongst its citizens, while the UAE will attract international talent through grants and long-term visas.
Regulation is a different dimension of the issue that directly influences the situation. By setting up rules and policies, governments will be able to win the trust of the public in terms of data handling, privacy, and ethical AI practices. The quickness has played a role in the area to be very fast, but the uniformity will be the measure of the long-term consequences.
AI is not a silver bullet, but it has become central to how Middle East economies plan their future. For Saudi Arabia and the UAE, it offers a path beyond oil that feels tangible, not theoretical.
If investment, skills, and governance stay aligned, AI could redefine the region’s economic identity within the next decade.