In today’s fast-paced world, whether a company will remain competitive on the market depends on how long it takes to effectively harness new technology while responding rapidly to emerging trends. Countries are no exception. To take a lead role on the international stage, not only should they keep pace with the recent advances but it is necessary that they drive the progress forward. One major factor that has already become indispensable for economic growth and development is large-scale implementation of AI technology.

According to preliminary estimates, AI will contribute up to $19.9 trillion to the global economy in 2030, representing 3.5% of the world’s GDP. By then investments are forecast to reach $2 trillion. The MENA AI market size is expected to surpass $166.33 billion, projected to grow at a compound annual growth rate (CAGR) of 35% from 2025 to 2030. Countries of the Gulf Cooperation Council (GCC): the UAE, Saudi Arabia, Bahrain, Kuwait, Oman and Qatar, along with Egypt, are predicted to gain the most from the groundbreaking technology.

AI contribution to GDP in the Middle East, 2030

Furthermore, should governments continue promoting innovation and implementation of AI across businesses and sectors, the effect might be stunning. However, to reap the benefits the MENA countries are to successfully embrace these cutting-edge technologies whilst avoiding numerous pitfalls which await them along the way.

With companies investing heavily in new technologies, supported by governments, the leading countries demonstrate strong commitment towards the development and introduction of artificial intelligence.

The potential for AI adoption varies by industry. Key sectors that are likely to drive the economic growth include: the retail sector, the public sector, transport and logistics, technology, media and telecommunications, and financial services.

Contribution of AI to Middle East GDP by industry, 2030 (%)

Together with energy and tourism they represent the most relevant industries to the target countries. To take a wider view of the present AI trends, we will first focus on retail, public sector and transportation as examples of industries with diverse impact across society and ongoing shifts.

The AI in retail market size will grow from $11.9 billion in 2024 to $15.51 billion in 2025 and to $62.64 billion in 2034. The MENA retail market size was valued at $808.51 billion in 2024 and is projected to increase from $855.97 billion in 2025 to $1 401.32 billion by 2032.

Digital transformation fosters retailers to adopt digital processes and capabilities promptly, resulting in an increased demand for AI and advanced machine-learning algorithms capable of enhancing operational efficiency through predicting customer needs, delivering personalized shopping experience and optimizing inventory precisely

Mostly, countries are leveraging AI for healthcare, education, finance and transportation. With efficiencies generated by AI technology having the potential to free up to $7 billion in annual budget additions for governments in the MENA region, governments stand to save significant financial resources.

In addition, countries endeavour to strike beneficial AI deals seeking to attain leadership and bolster their status. The UAE and KSA have still excelled in partnering foreign companies most.

The UAE and Saudi Arabia are not the only MENA countries that have invested in artificial intelligence though. It was announced in May, 2024 that Egypt partnered with Italy to establish an AI centre in Cairo whereas Qatar adopted $2.5 billion in incentives for programs on AI, technology and innovation.

It was a fruitful year for the latter’s internal policy, as well. Under Qatar National Vision 2030, its healthcare industry underwent a significant digital transformation with the establishment of the centralized electronic health record (EHR) system that now covers 80% of healthcare institutions within the country. Building on this digital foundation, Qatar has made investments to expand telemedicine and AI-based healthcare solutions, aiming for 75% of all diagnostic imaging tools to integrate AI by 2025.

Jordan’s health sector is also expected to soar due to $100 million pledged by the Abu Dhabi Fund for Development (ADFD) to support its digital transformation.


Yet, within the region, governments differ considerably in their readiness for implementation of AI in the delivery of public services.

Government AI Readiness Index in the MENA Region, 2024 (Overall Scores)

The region displays the widest range of scores in the index: from the UAE at the forefront with a score of 75.7 to Yemen with 14.6, the lowest-performing country globally. At the pillar level, MENA performs near the global average but shows notable variations, indicating room for improvement in AI strategies, governance frameworks, and responsible use of the technology in question.

The global AI in transportation market size accounted for $4.5 billion in 2024, grew to $5.53 billion in 2025 and is predicted to surpass $34.83 billion by 2034, representing a healthy CAGR of 22.7% within the period.

With the MENA AI in logistics market valued at $570 million, according rough estimates, AI-driven logistics solutions are projected to reduce operation costs by up to 30% through route optimization, demand forecasting, inventory management and freight brokerage.

These are some of the field’s achievements and promising initiatives:

Lastly, throughout the MENA region high-tech smart mobility projects are implemented to combat modern urbanization challenges such as traffic congestion through the use of artificial intelligence. They are mainly carried out in new smart cities: Masdar City and Smart Dubai Initiative in UAE, Neom Bay in Saudi Arabia, Lusail City in Qatar, Haitham City in Oman and New Alamein City on the Mediterranean Coast in Egypt.

Anyway, for a positive long-term impact of AI in such industries as retail, government sector and transport, large talent pools and adequate financial resources are required, as well as simultaneous development of other areas including finance, energy and tourism. These will be the matter for further discussion alongside manifold difficulties associated with AI application and possible ways of addressing these issues.