A recent report by Deloitte, in collaboration with Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), reveals that more than 65% of organizations in the Middle East plan to increase investments in AI over the next year. This surge in AI spending comes despite facing challenges related to talent shortages and technology capabilities.
The 2025 State of AI in the Middle East Report highlights both the opportunities and obstacles organizations face when adopting AI technologies. With insights from over 150 business and technology leaders from the UAE, Saudi Arabia, and Qatar, the report discusses the growing demand for AI adoption and the strategies used to maximize its potential.
While the Middle East is rapidly increasing its AI investments, many organizations are struggling with the foundational elements required for effective AI implementation. According to the report, over 80% of organizations feel pressure to adopt AI, but nearly half lack the necessary talent and technological infrastructure to scale AI solutions successfully. Despite this, 69% of organizations still plan to increase their AI investments in the coming year.
Mutasem Dajani, CEO of Deloitte Middle East, emphasized the region’s strong commitment to AI, fueled by government investments in AI infrastructure and local talent development. He believes this transformation is positioning the Middle East as a leader in AI innovation, accelerating the shift toward knowledge-based economies and encouraging organizations to rethink their operations.
The survey revealed that while most organizations feel prepared in terms of technology infrastructure (71%), talent (68%), and strategy (69%), there are concerns around risk and governance, particularly with Generative AI (GenAI). Only 41% of leaders expressed readiness to manage risk and governance for GenAI deployment.
Professor Sami Haddadin, MBZUAI’s Vice President for Research, noted that while organizations in the region are eager to deploy AI, they are not fully prepared in terms of talent, strategy, and infrastructure. He stressed the importance of developing local AI talent and fostering deeper research collaborations in areas like energy and sustainability.
The report also highlights the significant benefits of GenAI, with 91% of respondents identifying increased productivity as a key advantage. Interestingly, one-third of organizations in the region are allocating over 60% of their AI budget to GenAI, a significantly higher proportion than the global average. However, 41% of organizations also view AI as a potential threat to their current operating models.
A major challenge facing organizations in AI adoption is selecting the right technologies. Nearly 34% of respondents cited this as a significant obstacle. Additionally, identifying appropriate use cases for AI remains a challenge, as many organizations struggle to align GenAI applications with their business objectives.
Yousef Barkawie, AI & Data leader at Deloitte Middle East, emphasized the importance of organizations taking an analytical approach to AI deployment, developing clear strategies to assess demand, supply, and enablement of AI to ensure effective scaling and return on investment.
Some key findings from the report include:
- UAE leads in adopting IT, digital, and operations-focused AI.
- Most organizations are still in the early stages of AI adoption, with use cases focused on content generation and summarization.
- One-third of organizations in the Middle East are dedicating more than 60% of their AI budgets to GenAI, compared to 72% of global organizations allocating less than 40%.
- Nearly 70% of organizations plan to increase AI headcount, highlighting the need for talent growth and upskilling.
- Organizations primarily view AI’s benefits as increased productivity (91%) and efficiency, but struggle to measure ROI.
- Data security (65%), regulatory compliance (67%), and the talent gap (44%) are major concerns for AI implementation.
- A significant hurdle for 34% of respondents is selecting the right technologies for AI development and deployment.
