Oman’s first specialised economic zone dedicated to artificial intelligence is expected to attract around RO106 million, or $275 million, in investment across three phases, as the Sultanate moves to build a stronger domestic AI and digital technology ecosystem.
The zone will cover approximately 104,000 square metres near Muscat International Airport and is being developed and operated by Afouq Investment and Development United.
Construction of the first phase is expected to begin in the fourth quarter of 2027, according to Afouq Chairperson Dr Siham bint Ahmed al Harthi.
Zone will combine AI infrastructure, labs and startup support
The planned development will include business incubators and accelerators, prototyping and robotics laboratories, industrial automation hubs, a dedicated research and application centre, a data centre and cloud computing infrastructure.
Training and event facilities are also planned.
Afouq is additionally in discussions with international universities about establishing a specialised university focused on AI technologies within the zone.
The overall model is intended to create an integrated environment where research, infrastructure, startups, training and commercial technology development can operate in one location.
Microsoft and IBM among companies in discussions
Al Harthi said Afouq is in talks with major international technology companies, including Microsoft and IBM.
The developer is also assessing potential partnerships with local and international investment funds and technology companies.
No agreements with those companies were confirmed in the source, and the discussions remain exploratory.
Investor incentives include tax exemptions and full foreign ownership
The project is being positioned around the incentives available through Oman’s special economic zones and free zones framework.
These include tax exemptions and the ability for foreign investors to own 100% of their operations.
Such incentives are intended to attract global technology companies while also supporting local innovators and startups.
Royal decree formally establishes the zone
The Artificial Intelligence Special Economic Zone was established through Royal Decree No. 50/2026.
It will operate under Oman’s special economic zones legal framework and will be overseen by the Public Authority for Special Economic Zones and Free Zones in coordination with the Ministry of Transport, Communications and Information Technology.
The two bodies will jointly supervise development, management and operations.
Oman wants to move from technology consumption to production
The zone forms part of Oman’s wider effort to transition toward a knowledge- and innovation-based economy.
The stated ambition is to shift from importing and consuming technology toward developing, producing and competing with technology internationally.
The zone is therefore intended to support advanced technology localisation, applied AI research and wider deployment of AI across economic and public-service sectors.
Startups and unicorn ambitions form part of strategy
The project also places emphasis on Omani startups.
The zone plans to support local companies through scaling programmes designed to help them expand more rapidly and potentially develop into billion-dollar businesses.
That aligns with Oman Vision 2040, which targets increasing the digital economy’s contribution to GDP to around 10% by 2040.
Why this matters
The development is significant because Oman is combining infrastructure, incentives, research, skills and startup support within a single dedicated AI zone.
That creates a more comprehensive proposition than a standalone data centre or innovation hub.
If the project attracts anchor technology companies, universities and investment partners, it could help Oman build a stronger domestic base for AI development and commercialisation.
Editor’s note
The key question will be execution.
The zone has a clear policy framework, defined investment ambition and a broad infrastructure plan, but Phase 1 construction is not expected to begin until late 2027.
The next meaningful milestones will be securing anchor tenants, confirming university and technology partnerships, and translating the planned data centre, cloud and research infrastructure into active AI workloads and commercial projects.
