TECHNOLOGY

The UAE’s technology sector continues to expand rapidly in 2025. The ICT market is projected to reach AED 191.6 billion (USD 52.2 billion) by year-end, supported by a 10.3% CAGR, largely driven by AI, cloud computing, 5G, and cybersecurity. Between January and September 2025, UAE tech companies raised USD 2.0 billion, a 6% increase from the same period in 2024. Meanwhile, the broader technology services segment is expected to grow at 6.24% annually (2025–2029), reaching USD 4.79 billion by 2029. These trends reflect the UAE’s digital government agenda and commitment to emerging technologies as key enablers of national transformation along with the global pioneering role in driving sovereign AI, as manifested in projects like Falcon Arabic to be illustrated later in this report.

A. Key Opportunities

The UAE’s development of the Falcon LLM family—including Falcon 1, one of the region’s earliest high-performance open-source models, and Falcon Arabic (2025), a state-of-the-art Arabic language model—demonstrates the country’s growing capability to produce home-grown AI systems comparable to leading global and regional models.

Advanced AI & Machine-Learning Integration

Expanding next-generation connectivity and ICT infrastructure (projected to reach AED 192 billion in 2025) creates significant opportunities in smart cities, utilities, logistics, real-time monitoring, and IoT-based service platforms. This positions the UAE as a regional leader in connected, data-driven services.

The UAE Digital Government Strategy 2025 is accelerating demand for e-services, sovereign cloud solutions, cybersecurity, and AI-driven workflows. In 2025, the country secured USD 220.6M in new data-center investments and is adding 200 MW of capacity through the G42-Microsoft partnership. With AED 13B allocated to build the world’s first AI-native government by 2027, the UAE now stands alongside France, Canada, and Saudi Arabia as one of the few nations proactively developing end-to-end national AI capability.

A Global Sovereign AI Leader

The UAE is strengthening its leadership in AI talent and research through world-class institutions such as MBZUAI, which expanded its programs in 2025, and national champions like G42 and ATRC that drive cutting-edge AI R&D. This ecosystem positions the UAE to become a producer of advanced AI technologies, not just a consumer—supporting faster innovation, greater technological independence, and exportable AI capabilities across the region.

Building a National AI Talent and Research Engine

With AED 13B allocated to build the world’s first AI-native government by 2027, the UAE now stands as one of the few nations proactively developing end-to-end national AI capability.