AI is now the new normal. Everyday there is a new AI popping up for a multitude of tasks, transforming the way we work and function. Countries now want to adapt to these new technological advances and the UAE is no different.
The UAE is gearing up to become an AI leader. Investors are sensing this shift in culture and are keeping an eye on the future of AI investment in the UAE. That is what this blog is about, exploring the future of artificial intelligence in the UAE by understanding the trends, opportunities, and challenges of AI investment.
What are the Trends for AI Investment in the UAE?
The following are a few trends shaping the AI sector in the UAE, contributing to becoming a leading name for the AI market globally.
1. Government Support for AI growth
The UAE government is on track to achieve its target of making AI contribute 14% of its GDP by 2030 (source). As per the UAE National Strategy for Artificial Intelligence, there have been various initiatives and programs to promote AI adoption in the UAE.
The country has taken the initiative to provide a controlled environment for businesses to experiment and integrate AI while following the regulatory framework. The FSRA’s RegLab and ADGM’s Digital Sandbox are a few such initiatives.
AI-focused free zones allow AI startups, investors, and businesses to have 100% ownership and tax benefits. While foreign businesses need local partners in the mainland zone, they have access to government AI projects and the flexibility to operate anywhere in the UAE and use the locally available resources.
2. Access to Global Funding
In recent years, the UAE has been attracting FDI. The tax benefits, visas, property laws, and strict investor regulations create the best AI funding opportunities in the UAE. The government is working closely with the business and startup institutes for research and support to attract FDI. AI has been one of the strongest technologies, gaining the attention of investors.
Local summits like the International Investor Summit, the Global Investor Summit, the CMT Global Investment Summit, and more help investors familiarize themselves with the UAE’s ecosystem, and local businesses and startups can connect with global investors. Whether you want to invest in AI in Dubai or Abu Dhabi, you can find startups, businesses, and fellow investors from the UAE to expand your network and explore the UAE AI ecosystem.
What are some AI Investment Opportunities in the UAE?
The growing AI ecosystem and investor-friendly policies make AI investment in the UAE lucrative. The following are a few AI investment opportunities in the UAE that you must know:
● Growth of the AI ecosystem in the UAE
Under the National Strategy for AI 2031, the UAE has been relentlessly working on creating a supportive AI ecosystem with incentives, R&D institutions, a regulatory framework, AI-supportive infrastructure, and more to attract AI startups, FDI, and AI talent from across the globe. The holistic growth of AI infrastructure makes it easier for startups and businesses to incorporate AI and improve their performance.
● Sector-wise Adoption of AI
With thriving infrastructure, lucrative tax benefits, and improvement in efficiency, AI has been rapidly adopted in many industries. Attending startup events can help you explore the growing markets for AI so you can decide which one to invest in.
Few sectors that have been at the forefront of growth with the adoption of AI:
➔ Healthcare: Where AI is used to streamline healthcare services such as diagnosis, report analysis, and more.
➔ FinTech: Here AI is used in fraud detection and financial advisory, and automates banking.
➔ Transportation & Logistics: The smart city initiatives are designed based on AI to improve traffic management and delivery.
➔ Retail & Ecommerce: AI enhances the user experience and inventory management.
➔ Defense: The UAE is investing in utilizing AI in defense through projects like autonomous systems and an AI-powered electronic warfare center.
What are some AI Investment Challenges in the UAE?
There are a few challenges that you should know about before investing.
● Regulatory Structure for AI
Incorporating AI requires addressing ethical and security concerns. While the UAE has created a secure AI ecosystem, setting up a robust regulatory framework can be complex. The ethical practices for data privacy and security are among the primary concerns of AI startups in the UAE. Learn about the regulations before investing.
● Growing Competition in AI Startups
The lucrative policies make the UAE an attractive spot for startups and investors focusing on AI. Therefore, there has been competition in all the sectors incorporating AI. So, explore the industry competition while deciding where to invest in the UAE.
● Talent Acquisition for AI Projects
While the AI startups in the UAE are thriving, there is a constant need for AI talent. As per a report, the UAE has only 7000 AI specialists (source). Therefore, acquiring a skilled team for AI businesses can be tricky and costly. Consider this when investing.
Conclusion
The government support for businesses, startups, research institutes, and AI education creates a lucrative market for AI investment in the UAE. The growing AI ecosystem and adoption of AI in diverse sectors like healthcare, fintech, transportation, and more create many AI investment opportunities in the UAE. However, the strict ethical and regulatory frameworks, competition, and constrained AI talent challenge the future growth of artificial intelligence in the UAE. Startup events like the International Investor Summit can help you explore AI funding opportunities in the UAE!
FAQs
1. What is the future of AI in the UAE?
AI has one of the most promising futures in the UAE. The national AI research and training strategies are designed to boost AI adoption in diverse sectors. The UAE government has created a lucrative market for investments in healthcare, fintech, education, transportation, and other markets. The proactive strategies and regulations make a secure AI ecosystem for investment.
2. What is the UAE National Strategy For Artificial Intelligence 2031?
The UAE National Strategy for Artificial Intelligence 2031 was launched in 2017. The goal is to focus on the growth of AI and make it a major contributor to their GDP. The strategy focuses on boosting AI R&D, education, startups, and businesses to attract FDI and local funding. They have been investing in creating infrastructure to support AI businesses and supporting the incubators & accelerators to boost AI startups. The AI strategy is focused on the holistic growth of AI in the UAE.
3. How to find AI investment opportunities in the UAE?
You can find AI investment opportunities in the UAE by attending startup events & AI summits, being active on social media, and connecting with incubators and accelerators. Connecting with an angel network can help you find early-stage startups for investment. Attending startup events like the IIS can help you explore the AI market in the UAE before investing and identifying promising startups.
4. Which sectors are the best for AI investment in the UAE?
A few sectors known for their advanced adoption of AI are Healthcare, Fintech, Transportation, Customer Management, E-commerce, and Education. These industries have experienced massive growth in recent years. However, before investing, you should check the startup’s product/service, due diligence, target market, and growth potential.
