Middle East businesses are planning to increase AI spending, according to a new report by Deloitte in collaboration with Mohamed bin Zayed University of Artificial Intelligence (MBZUAI).
The 2025 State of AI in the Middle East Report shines a spotlight on the challenges organisations face when investing in AI technology and ensuring they fully understand and utilise its potential.
The Perfect Storm: A perspective on unlocking AI’s value in Middle East draws on insights from more than 150 business and technology leaders across the United Arab Emirates (UAE), the Kingdom of Saudi Arabia (KSA), and Qatar, supplemented by interviews with key industry figures.
AI businesses in the Middle East
While organisations across the Middle East are rapidly increasing AI investments, many lack the foundational elements needed to realize its full value.
The latest research shows more than 80 per cent of organisations feel pressured to adopt AI, yet almost half say they lack the talent and technology capabilities for successful scaling.
Despite these challenges, 69 per cent of organisations plan to increase investment in AI technologies in the coming year, according to the report.
Mutasem Dajani, Deloitte Middle East CEO, said: “The GCC region is making substantial investments in AI, driven by strong government commitments. With increasing funding for AI infrastructure and a growing emphasis on developing local talent, the region is positioning itself as a global leader in AI innovation.
“This transformation is accelerating the shift toward knowledge-based economies, compelling organisations to fundamentally rethink their operations.”
Respondents in the survey claimed high levels of preparedness for technology infrastructure (71 per cent), talent (68 per cent) and strategy (69 per cent).
Risk and governance were slightly lower in terms of feeling highly or very highly prepared (63 per cent). However, when considering only Generative AI (GenAI), global leaders felt much less prepared to address risk and governance, with 41 per cent of leaders reporting they were only slightly or not at all prepared.
Professor Sami Haddadin, MBZUAI’s vice president for research, said: “This research highlights an increased focus on developing local AI specialists and practitioners who understand the potential of AI and how to execute implementation, while addressing concerns such as privacy and ethics.
“The report reveals a critical disconnect – a strong appetite among Middle Eastern organisations to deploy AI outpacing their readiness in terms of talent, strategic planning, and infrastructure.
“As the world’s first university dedicated to artificial intelligence, MBZUAI is proud to be playing a pivotal role in addressing this major hurdle. We’ve made great strides in the last year through programmes such as the MBZUAI Executive Programme (MEP), the Master in Applied AI, and tailored workshops, we are empowering leaders and organisations to navigate the nuanced dynamics of AI adoption including managing risks and maximizing value.
“Implementing AI solutions requires talent, and growing the AI supply ecosystem is critical. This includes upskilling current professionals, preparing our current students, and fostering constructive and deeper research collaborations across key sectors and impactful areas such as energy and sustainability.”
In terms of the perceived key benefits of GenAI, 91 per cent of respondents expect increased productivity to be the most transformational benefit.
The report found that one in three organisations in the Middle East are spending more than 60 per cent of their AI budget on GenAI, compared to data showing that 72 per cent of global organisations are spending less than 40 per cent.
However, not all organisations view AI in a positive light, with 41 per cent seeing AI as a significant threat to their current operating model.
A significant hurdle faced by organisations developing and deploying AI tools is selecting the right technologies, as highlighted by 34 per cent of respondents.
Given the complexity of the available AI solutions, it can be difficult for business leaders to know which applications align best with organisational objectives, while another major challenge – difficulty identifying use cases – is closely linked, as organisations grapple with how GenAI can benefit their business.
Yousef Barkawie, AI and Data leader at Deloitte Middle East, said: “There is a myriad of ways AI can supercharge efficiency and productivity, while also paving the way for entirely new products, citizen services, and business models.
“It’s vital that organisations take an analytical approach and develop clear strategies to assess demand, supply, and enablement of AI to ensure the technology can scale effectively, solve challenges, and generate a solid return on investment.
“We see the need for elevating boardroom decision-making skills and frameworks to cope with this disruption”.
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