The MENA region is undergoing a significant digital transformation, with total IT spending projected to reach $169bn by 2026. This represents an 8.9% increase over the previous year, reflecting a structural pivot towards artificial intelligence (AI) integrated infrastructure across major regional economies. A primary driver of this growth is the rapid expansion of data centre systems, which is expected to see a 37.3% surge in investment as regional players seek to secure sovereign cloud capabilities. As of 2025, Saudi Arabia’s domestic AI market has reached a valuation of $1.2bn, and is forecast to expand significantly to $4.4bn by 2034, maintaining a compound annual growth rate (CAGR) of 15% as industrial adoption accelerates. Worldwide, the digital economy is anticipated to contribute $28trn to global GDP by 2026, roughly 22% of the total.
Human Capital
Successful high scale technological strategies depend heavily on a skilled workforce, a challenge being addressed through national programmes across the GCC. In the UAE, the Coders HQ and AI Talent Bridge initiatives have been pivotal, contributing to a 13% growth in AI-exposed job roles since 2021. Similarly, Qatar’s National Skilling Programme has certified over 13,000 professionals as of 2025, aiming to train 50,000 individuals to support a QR40bn ($11bn) digital economy by 2030. In Saudi Arabia, the One Million Saudis in AI initiative met its target in late 2025, training over one million citizens to ensure broad-based digital participation. Bahrain is also accelerating its efforts through Tamkeen’s AI Training Programme, which covers 100% of training costs for nationals to produce a pipeline of AI generalists and specialists. Oman has launched a specialized undergraduate degree in AI to prepare graduates for roles in the Fourth Industrial Revolution.
Sectoral Strategy
AI has transitioned from a theoretical concept to a central enabler of the region’s industrial and sustainability goals. In the UAE, the energy sector is leading this shift; ADNOC and the technology group G42’s joint venture, AIQ, deployed the ENERGY ai model in 2025 to optimise upstream assets in oil and gas production, reducing unplanned shutdowns by up to 50%. Kuwait is similarly advancing its digital oilfields, with Kuwait Oil Company’s Big Data Galaxy initiative allocating $800m to digitise 93% of its oilfields by 2025. In Saudi Arabia, AI-driven environmental modelling is facilitating 5-10% of the reductions in emissions required for the Saudi Green Initiative, while AI forecasting has reduced renewable energy prediction errors by 30%. Beyond energy, the private sector is embracing agentic AI; the Saudi market for these autonomous systems was valued at $115.1bn in 2025, reflecting a strong appetite for automation in non-oil sectors. Qatar is also leveraging AI for governance, with its GovAI programme to enhance public sector efficiency across several government ministries.
Sovereign Governance
As technological capabilities expand, the focus of regional leadership has shifted towards digital sovereignty and the establishment of robust regulatory frameworks. A 2025 joint executive programme between the Digital Cooperation Organisation and the GCC, running through 2026, aims to harmonise cross-border data policies and ethical standards. This alignment is designed to create a more unified digital market capable of competing with global tech centres while ensuring local data remains protected. The Saudi Data and AI Authority’s (SDAIA) launch of a Regulatory Sandbox in 2025 has provided a controlled environment for testing Privacy Enhancing Technologies and AI innovations. Such initiatives ensure that rapid technological adoption does not compromise the Kingdom’s Personal Data Protection Law. Since 2023, the establishment of the International Centre for AI Research and Ethics in Riyadh has served as a regional anchor for ensuring that AI development aligns with cultural and ethical values. By aligning local academic frameworks for AI qualifications with global benchmarks, the Kingdom is fostering international employer confidence in a new generation of Saudi graduates.
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