International Monetary Fund regional director Jihad Azour said continued investment in artificial intelligence will be a “game changer” for the UAE and the Gulf economy as a whole as the region establishes itself as a global technology hub.
Investing in AI is a key part of the UAE's economic diversification drive. Omar Al Olama, Minister of State for AI, Digital Economy and Remote Work Applications, said Emirates has invested $148 billion in AI domestically and internationally since 2024, and the country is emerging as a leader in data center capacity.
Azour said maintaining this level of investment could boost the UAE economy by 0.7%.
“This is a game changer. It's very important,” he said in an interview. The National It took place at the IMF headquarters ahead of the start of the Abu Dhabi Financial Week on Monday.
“We are increasingly seeing technology play a bigger role in the non-oil economy, not just in financial and government services, but also in other types of non-oil activities.”
The UAE has also embraced other elements of digitalisation, such as digital currencies, cross-border digital payments and the development of crypto assets, which are helping the Emirates attract capital.
This year's Abu Dhabi Financial Week coincides with the 10th anniversary of Abu Dhabi's ADGM, which has emerged as one of the world's largest financial centers due to its strong regulatory framework, and whose financial innovations have helped attract global fund managers.
“The past 10 years have been critical to the transformation of the UAE economy,” Azour said.
Strengthening the non-oil sector, investing in technology and AI, and developing services have “helped the UAE become one of the world's emerging mid-tier economies,” he said.
The past decade has been critical to the transformation of the UAE economy
Jihad Azul,
IMF Regional Director
Other Gulf countries have also incorporated digitalization into their diversification efforts by moving activities to online platforms since the coronavirus pandemic. Telemedicine and digital banking have become commonplace in the public sector, while private companies are leveraging AI and blockchain to increase efficiency, according to an IMF paper published this year.
“A serious player”
The UAE and Saudi Arabia's AI ambitions were significantly accelerated in November when the US approved the export of advanced chips.
The announcement, which will allow the UAE's G42 and Saudi Arabia's Humane to buy the chips, is seen as a landmark moment for the Gulf state's AI leaders.
“This is a sign that these countries are becoming serious players in this industry,” Azul said.
This approval follows important steps taken by the UAE and Saudi Arabia this year.
For the UAE, this includes the announcement to build a 5 GW UAE-US AI campus in Abu Dhabi. U.S. companies joining G42 on this project include Cisco, Nvidia, OpenAI, Oracle, and SoftBank.
Humane, a technology company backed by Saudi Arabia's Public Investment Fund, has made recent gains including deals with Qualcomm, Cisco and AMD.
Azur said there are three aspects to AI readiness in the Gulf region: investment in infrastructure, technology and capital, and development of knowledge about advanced technologies.
“And here [it] This region not only serves as a platform for investment; [a] It’s a platform for innovation,” he said.
The emergence of AI also comes with risks. Market analysts say the widening of asset valuations could lead to a market correction that could affect 40% of the world's workforce.
“It is therefore very important for these countries not only to look at the opportunity, but also to see what changes this will bring to their economies and how it will help them modernize their public services,” Azur said.
In a paper published this week, the IMF said the economic outlook for Gulf countries is resilient due to strong non-hydrocarbon activity, limited spillovers from regional conflicts, and moderate direct impact from U.S. tariffs.
The fund said global economic uncertainty continues to pose a risk to the regional economic outlook, which is expected to be supported by easing oil production cuts and increasing natural gas production.
Changing trade patterns
Azour sees an opportunity for the Gulf and Middle East to become more interconnected, especially as tariffs reshape global trade.
He warned that countries were at risk of being left out in a global economy exposed to changes in trade routes and value chains. A more dynamic approach could reduce these risks, he said.
For the region, this means increasing the number of women and young people in the workforce, investing in infrastructure, and preparing for the potential negative effects of AI on the broader labor market.
“I think this is where this region can find itself, or find a model that allows it to do that.” [it] To achieve peace, stability, growth and prosperity for the next 10 years,” Azul said.
