The United Arab Emirates has emerged as the leading country in the Middle East and North Africa (MENA) region in terms of artificial intelligence (AI) startup activity relative to population size, according to a new report released by the Mohammed Bin Rashid School of Government in collaboration with Google.org. The report, titled “The AI SME Ecosystem in the UAE: Overcoming Challenges and Expanding Horizons,” offers a comprehensive overview of the UAE’s dynamic AI startup sector, highlighting key developments, challenges, and future potential.
The report reveals that Emirati companies represent 25.1% of all AI startups surveyed across the region, with over half of them (53.1%) headquartered in Dubai. Based on a field study involving 81 AI-focused small and medium-sized enterprises (SMEs) selected from a regional pool of 327 companies, the report also includes comparative insights from leading ecosystems across the Gulf, North Africa, and the Levant, positioning the UAE as a primary case study.
His Excellency Dr. Ali bin Sebaa Al Marri, Executive President of the Mohammed Bin Rashid School of Government, reaffirmed the institution’s commitment to supporting future leaders in public administration. He emphasised that the report showcases SMEs as vital drivers of AI-led innovation in the country. “The study outlines the growth of the AI ecosystem in the UAE, underlining the rising roles of Dubai and Abu Dhabi as regional innovation hubs. Collaborative efforts remain key to unlocking this sector’s full potential,” Al Marri stated.
Rasha Al-Hallak, Head of Government Affairs and Public Policy at Google UAE, also commended the report, noting that it delivers valuable insights into the UAE’s AI startup landscape. “The report highlights the remarkable innovation led by local entrepreneurs and their potential to shape the future of AI both nationally and across the region,” she said.
According to the report, the UAE has successfully built one of the most advanced and cohesive AI ecosystems in the region. This progress has been driven by the country’s robust digital infrastructure, mature data environment, and regulatory reforms—creating an ideal setting for adopting cutting-edge AI technologies, including generative AI.
Moreover, UAE-based companies demonstrated a high level of maturity in implementing AI technologies such as machine learning, natural language processing, and computer vision. Compared to their regional counterparts, these companies benefit from easier access to private capital, fueling their growth, while many other economies in the region remain reliant on public or external funding sources.
Despite these achievements, the report highlights ongoing challenges. These include the development of specialised AI talent, effective governance frameworks, and the enforcement of ethical and safety standards. Intellectual property protection also remains a concern, particularly regarding regional and international portfolio expansion.
Nevertheless, the UAE is praised for its clear regulatory frameworks and strong legal enforcement, which offer a solid foundation for continued growth. Still, some companies expressed reservations about broadening their intellectual property holdings beyond the local market.
The report also cautions against a widening digital and AI divide in the region. It underscores the UAE’s strategic position to drive regional AI development—especially given forecasts that AI technologies could contribute over USD 320 billion to the MENA economy by 2030.
As a premier academic and research institution specializing in governance and public policy in the Arab world, the Mohammed Bin Rashid School of Government continues to empower AI governance through a comprehensive ecosystem of education, training, and applied research—laying the groundwork for a future-ready public sector.
