Beyond Oil: The UAE's Bold Vision for an AI-Driven Economy

Written by Ian Rimmer, Managing Director of Technology Operations at Abacus Group

For decades the Gulf region has been synonymous with oil wealth, with the UAE contributing around 5% to global oil production. But, as the region continues to invest in policies and infrastructure that attracts organizations within the financial and technology sectors, its identity is shifting. Currently around 25% of the UAE’s GDP is derived from oil and gas. It is no surprise that the country is looking to diversify beyond oil to a new frontier – Artificial Intelligence (AI). 

Governmental Balance of AI Investment & Regulation in the UAE 

In 2017, the UAE became the first country in the world to create a position within government specifically focused on AI, The Minister of State for Artificial Intelligence.  This initiative was soon followed in 2019 by the adoption of the UAE National AI Strategy 2031. The strategy aimed to position the country as a leader in AI adoption throughout the government while also creating a welcoming ecosystem for AI startups and top talent in the sector. Furthermore, in 2024 the UAE government established MGX Fund Management Limited (MGX), a USD $100B investment fund focused on AI technologies, becoming the world’s foremost sovereign investor in AI.

In addition to investing in AI and other burgeoning technologies, the UAE has also established firm regulatory standards in order to ensure data privacy and protection in this new era. In 2023, the Dubai International Financial Centre (DIFC) integrated AI regulations within its existing framework, amending its Data Protection Law to apply to all autonomous and semi-autonomous systems that process personal data. Historically, the DIFC relied upon the UK and EU data protection principles, but this change moved beyond GDPR standards, showcasing the UAE’s leadership in the space.

The updated standard ensures autonomous and semi-autonomous systems are designed to ensure ethical, transparent, and secure use of AI with requirements including: 

• Organizations must inform individuals when their data is being processed by an AI system and clearly describe the system’s purpose.
• Systems must be designed with fairness, security, transparency, and accountability, with audits and risk assessments required for high-risk applications to prevent bias.
• AI systems can only process personal data for human-defined or approved purposes and must operate within constraints set by humans.  

In 2025, the Dubai Financial Services Authority (DFSA), the independent regulator for financial services operating within the DIFC, released a report on the interconnection of cybersecurity, AI, and quantum computing risks, indicating the regulator’s continued focus and concern about the impact of AI on key issues. Issues include the increased frequency and complexity of cyberattacks and the need for strict governance around AI use, clearly delineating cybersecurity as a major business risk.  

Creating an AI-Driven Innovative Business Sector 

The UAE’s investment in AI indicates a continued shift in the region towards technological advancements and innovation. Coupled with the Dubai Economic Agenda (D33) targeting to place the emirate among the top four global financial hubs by 2033 and Dubai’s strategic location and supportive regulatory environment, the region is a strategic hotbed for pacesetters. Through the DIFC Innovation Hub, established companies, digital labs, venture capital firms, regulators, and educational entities can be a part of an ecosystem of organizations investing in the technological advancement of the region. 

This shift towards diversifying investments in the UAE has already been recognized by the financial industry, with the number of hedge fund managers registered at the DIFC doubling in the previous 12 months. These firms recognize that rapid growth in the region is here to stay and supported by the UAE’s significant investment in AI and top talent alongside its diligent approach to regulating the technology. 

To learn more about why the UAE is attracting top asset managers, check out our recent blog.

Contact us today to learn how your business can thrive in the UAE’s AI-driven future.