Details

This report developed by the Mohammed Bin Rashid School of Government (MBRSG) with the support of Google.org, provides an in-depth examination of the UAE’s artificial intelligence (AI) startup ecosystem, with a particular focus on small and medium enterprises (SMEs). Based on fieldwork covering 81 UAE-based AI and digital SMEs—comprising over 25% of a wider MENA sample—the report explores how these businesses are adopting AI technologies, navigating infrastructure and regulatory frameworks, and playing a pivotal role in national innovation and economic diversification.

The findings reveal that the UAE has successfully cultivated one of the most cohesive and enabling AI ecosystems in the region, supported by world-class digital infrastructure, mature data governance, and agile regulatory reforms. Unlike regional peers, UAE-based SMEs no longer consider basic infrastructure a barrier; instead, they face next-generation challenges such as cost-effective access to GPUs, edge computing, and large-scale storage. While regulatory frameworks are generally viewed as supportive and accessible, concerns remain regarding compliance costs and the need for clearer AI-specific regulations aligned with global standards.

The report also highlights a vibrant funding environment, with both public initiatives—like the $2.7 billion Future Accelerator Fund—and private sector capital playing key roles. However, gaps persist in early-stage and scale-up financing. Talent shortages, particularly in areas related to AI governance such as ethics, safety, and compliance, continue to hinder ecosystem growth. Moreover, intellectual property protection remains limited, with only a small percentage of AI SMEs registering IP abroad.

Encouragingly, generative AI adoption is nearly universal among UAE AI SMEs, with widespread application in areas such as marketing, customer service, analytics, and design. The report concludes that the UAE’s strong foundations have positioned it as a global AI player, shifting its strategic focus from regional leadership to international competitiveness and global norm-setting. To sustain this momentum, it recommends expanding support for SME scale-up, accelerating talent development, enhancing AI governance frameworks, investing in next-generation infrastructure, and establishing a UAE-led regional AI cooperation model.