2024 is fast emerging as the year of Middle Eastern sovereign wealth funds turning out to be some of the most prominent entities in the landscape of AI investment around the world. Oil-rich countries like Saudi Arabia, the United Arab Emirates (UAE), Kuwait, and Qatar have led this charge, which basically represents a strategic shift within their own economies: opting for diversification and investment in future technologies. Together, these countries are investing billions of dollars in AI start-ups targeting the region to become the first AI hub in the world.
Saudi Arabia’s Vision 2030″ is a leader in new change. The country has a $40 billion AI fund and is targeting to become less reliant on oil while becoming the global leader in technology innovation. The Public Investment Fund in Saudi, worth above $900 billion, is actively investing in AI-related projects. So much so that earlier, it was part of some high-profile deals and, with this fund alone, the future of AI in the Middle East was supposed to be written, adoption across various sectors-from healthcare to finance-would accelerate, and the country’s GDP would surge.
And across the border, the UAE is also showing similar efforts. G42″ is among the largest AI firms headquartered in Abu Dhabi that recently entered into a $1.5 billion partnership deal with Microsoft to launch a $1 billion fund meant to fuel talent nurturing at local levels in AI. Dubai wants to be the regional AI powerhouse, an aspiration underlined by initiatives such as the “UAE National Artificial Intelligence Strategy 2031,” which would see government expenses streamlined by 50 percent through the use of AI. Such a policy is accompanied by initiatives such as the establishment of the world’s first “Ministry of Artificial Intelligence.”.
Investments by Middle Eastern sovereign wealth funds into AI have skyrocketed. In 2023, the region recorded venture capital deals worth a record-breaking $415.1 million in startups focused on generative AI. A former leader in these areas, Israel continues to gain increasing investments in cybersecurity and autonomous systems, while Saudi Arabia and the UAE are closing the gap fast. The role of AI technology cuts across banking, utilities, and government services, and the adoption of AI is speeding up in enterprise sectors.
These investments are not merely about economic diversification but instead carry more of the taste for long-term regional dominance in AI technology. Saudi Arabia and the UAE heavily invest in AI research and development, as well as education and talent building, in line with a defined path for the creation of sustained domestic pools of talent. The governments focus on attracting global AI talent while developing an innovation ecosystem through collaborations with leading global tech firms.
For instance, Mubadala, yet another giant UAE fund, invested in Anthropic, one of the main rivals of OpenAI, and has participated in several high-profile AI deals. Moreover, Saudi Arabia also wants to build a national AI infrastructure that could rival global players like the U.S. and China, going by the latest assessment in the not-too-distant future.
The implications of these investments are humongous. AI is likely to deliver significantly towards the region’s GDP by 2030 with PwC projecting that the Middle East will reap $320 billion from AI-driven growth. These will include new jobs opportunities, innovation driving, and facilitating the development of smart cities as the major recipients in sectors ranging from agriculture, health, and finance.
Nonetheless, the Middle East also poses a challenge to establish a sustainable AI industry. The region is short on talents capable of working with AI. In this regard, extensive education and training programs are being undertaken by the governments at a larger scale to produce an AI talent pipeline from local sources. Other mechanisms involved in achieving this goal consist of collaborations with global tech companies and academic institutions to obtain knowledge and expertise.
In summary, it now is the Middle Eastern funds that play such an important role in setting the future of AI, not only in their own backyard but globally. Pumping billions of dollars into the hottest AI start-ups, it sets the stage for purely revolutionary technological breakthroughs that can redefine these economies for years to come.
