Just one week ago, a $14.9 billion AI investment was unveiled at LEAP 2025, a global tech event held in Riyadh. Several global tech leaders, including Groq, Lenovo, Google, and Alibaba, committed to contributing to the country’s digital infrastructure, the creation of advanced AI technologies, and robotics-based manufacturing and technology centers.
This announcement is just one of many multi-billion-dollar initiatives regularly announced by the two leading countries of the Middle East – the UAE and Saudi Arabia. Their close proximity and fierce competition for regional and sometimes even global leadership have permeated almost all areas of the economy and life, with AI being the latest area of intense rivalry.
In 2024, the multi-billion-dollar commitments made by both countries toward AI reached their peak. Both the UAE and Saudi Arabia pledged a staggering $100 billion each toward AI projects. First, in March 2024, the UAE first made its announcement about the $100 billion directed toward AI initiatives. To manage the committed funds, the UAE's Abu Dhabi Sovereign Wealth Fund Mubadala and the regional technology giant G42, backed by the Royal Family, created MGX, a new investment management firm. With this high-profile backing, by September 2024, MGX partnered with BlackRock and Microsoft to create a $30 billion AI infrastructure fund focused on data centers and their power infrastructure.
Notably, in the same year, G42 received a $1.5 billion investment from Microsoft. In addition to the technological partnership, this deal also had geopolitical implications, as it strengthened the ties between the UAE and the US in light of the growing competition between the US and China in the AI domain.
Saudi Arabia did not stay behind. Their new “Transcendence Project,” worth $100 billion, was announced eight months after the UAE’s similar commitment. Revealed in November 2024, the project, backed by the Saudi Public Investment Fund, has already partnered with Google, Microsoft, and other global firms to establish new data centers and initiate several other AI-related programs.
Both countries have strong academic institutions and are investing in research programs, attracting some of the best global AI researchers.
The UAE’s flagship project in AI is the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), which, in the fall of 2024, welcomed 39 students from the world’s top 100 computer science universities, including Cornell University, Tsinghua University, the University of California, San Diego, the University of Edinburgh, and University College London. Their AI research focuses on four key themes: enhancing public services and quality of life; boosting industrial and manufacturing productivity and efficiency.
Dubai, the UAE’s second powerful emirate, showcases the country's AI prowess with autonomous vehicles, smart police patrols, and AI-driven healthcare. Abu Dhabi-administered large language model Falcon AI is a leading competitor to Meta and Google in the region, while MBZUAI’s Jais, launched in 2023, is considered the world’s most advanced Arabic LLM.
Saudi Arabia’s research capabilities are managed by King Abdullah University for Science and Technology (KAUST), which has developed their own supercomputer and attracted big names in the global AI field, such as Professor Jürgen Schmidhuber and Professor Bernard Ghanem. Their AI research priorities focus on healthcare, energy, and sustainability. The university also runs research programs in machine learning, computer vision, natural language processing, and robotics. Like the UAE, the university has also developed their own LLM, Allam, which is now being promoted to users in collaboration with IBM.
In the next five to ten years, both countries have ambitious plans to be among the global leaders in AI, not just importing technologies but creating new products and companies domestically, attracting capital, founders, and talent. Looking from afar, it seems that both countries are just following each other’s strategies, copying and pasting initiatives, raising the stakes, and attracting global technology partners.
The main difference between the two countries is in their approach to attracting talent. Saudi Arabia, with more than three times the population of the UAE, focuses on developing local AI talent. Meanwhile, the UAE, which has a predominantly expatriate population, prioritizes attracting foreign talent. Additionally, the sectors where AI investments are directed differ. Saudi Arabia’s focus is on government, mobility, healthcare, and manufacturing, while the UAE’s AI projects center around finance, digital transformation, autonomous vehicles, and robotics.
Another key difference is agility. The UAE allows individual emirates to pursue AI initiatives independently, acting quickly to implement projects. Saudi Arabia, on the other hand, follows a centralized approach, with SDAIA steering national efforts in AI.
While both nations offer attractive opportunities, their differing approaches and priorities require a focused strategy. Companies seeking to enter either market should not try to cater to both simultaneously. Instead, they should assess their strengths and align them with either the UAE’s agile, innovation-driven ecosystem or Saudi Arabia’s centralized, national-scale initiatives.
The language factor also plays a role. Most projects in Saudi Arabia require assistance from Arabic-speaking teams, whereas the UAE’s multinational landscape allows most projects to be handled in English as the primary language.
Partnerships are essential for navigating both markets. Understanding the differences in the two markets is crucial. We always advise our clients to have two or more different partners in the two countries. However, these partnerships shouldn’t lead companies to sit back and wait for opportunities to come. We also advise leaving room to reach out to clients directly, enhancing the sales pitch by bringing a local partner to the negotiation.
Success in both markets often requires a long-term perspective and a deep understanding of the local culture. While AI is one of the fastest growing industries in the world, the "slowly, slowly catch the monkey" principle that we use for the Arab Gulf markets when advising our clients, applies to it as well.
