Understanding the Gulf Cooperation Council's (GCC) AI strategy—spanning Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—has become essential for unlocking opportunities tied to the UK-GCC Free Trade Agreement and the region's $150 billion AI investment push. These investments are central to the GCC's broader effort to diversify economies historically dependent on hydrocarbon revenues, with sovereign wealth vehicles such as Saudi Arabia's Public Investment Fund and the UAE's Mubadala underwriting much of the buildout.

AI is widely regarded as a powerful accelerant for solving complex challenges. The GCC's strategy centers on heavy investment in digital infrastructure, and the prospective UK-GCC FTA is creating new avenues to capitalize on that momentum.

What's Driving AI Adoption in the GCC

In the era of Industry 4.0 and hyper-connectivity, the race to future-proof economies is intensifying. The GCC is pouring resources into what it calls the new intelligence paradigm, reshaping education curricula to develop the skills base the sector demands. Graduates from these programs are expected to increasingly populate AI-native start-ups—companies whose core products, workflows, and value propositions revolve entirely around AI.

The Economic Case: A $150bn Opportunity

The GCC's regulatory environment was designed to ease deployment, and AI momentum is shifting increasingly from the state level to the company level. Data-center projects in the region, for example, become operational within 18–24 months, compared with roughly 36–72 months in the United States. That speed advantage is compounded by the region's access to low-cost energy—a critical factor given the intensive power demands of large-scale AI compute.

Sector research indicates that AI adoption could deliver a potential gain of $150 billion for GCC economies, contingent on achieving sufficient scale. To reach that threshold, firms must integrate AI into their business models underpinned by clear strategies. Comprehensive AI adoption could also help close the GCC's productivity gap, raising industrial output from existing infrastructure. Agentic AI, in particular, is seen as holding transformative potential for workplace performance and innovation.

To explore the topic further, TBY spoke with Ahmed Jaber Al-Faifi, Senior Vice President and Managing Director of SAP Middle East and North Africa, a firm that has collaborated on Saudi gigaprojects.

Drawing on his own forecasting process, Al-Faifi recounted a telling example of AI's capabilities. When creating "… a forecast based on historical performance and pipeline, […] the AI module within our dashboard generated a more optimistic forecast; some 25 per cent higher than mine."

Though initially skeptical, he said "…the AI provided rationale based on granular deal-level data, flagging risk factors I hadn't considered. Over time, it proved to be accurate."

Highlighting how predictive models augment executive strategy rather than render it obsolete, Al-Faifi emphasized: "This is the level of insight our clients are demanding: proactive systems that enhance—not replace—human decision-making."

How the UK-GCC Trade Agreement Affects AI and Data Flow

"We are moving from transactional trade toward long-term strategic cooperation between advanced digital economies, and the Gulf is a key partner in that vision," said Julian David, CEO of the UK's technology trade association techUK.

Current and prospective trade partnerships depend fundamentally on the free flow of data, which is expected to be a key consideration in the prospective UK-GCC Free Trade Agreement—a deal that could emerge as a landmark of 2026. For Gulf states, aligning data-governance frameworks with international partners is a prerequisite for the cross-border AI services and research collaborations the region's strategy envisions.

TechUK represents over a thousand technology members ranging from start-ups to global corporations. In light of the FTA, David said his role "…is to ensure that digital cooperation sits at the heart of trade policy."

On the appeal of British collaboration with the GCC, he noted: "London and the wider UK ecosystem are now recognized as one of the world's three epicenters of AI innovation, alongside the Bay Area and China, thanks to our academic institutions, vibrant start-up scene, and adoption across sectors like financial and professional services."

The UAE's AI Strategy and the $500bn Stargate Project

The UAE ranks among the world's fastest-rising AI adopters—usage more than doubled from 10 per cent in 2013 to 27 per cent in 2024 and reached 56 per cent in 2025. In 2017, the UAE rolled out the world's first national AI strategy, and its current AI Intelligence Strategy 2031 targets global dominance. The country has invested more than $147 billion into AI since 2024.

The UAE's indigenous AI vehicle, G42, is operational. In partnership with OpenAI, Oracle, Nvidia, and Cisco, the country has secured a deal with Washington to build Stargate UAE—a $500 billion data center project slated to become the largest of its kind outside the United States. The agreement also reflects deepening US-Gulf technology ties, as Washington increasingly views Gulf partners as strategic nodes in the global AI supply chain.

Saudi Arabia, meanwhile, is leveraging its cost-effective energy infrastructure to position itself as the world's third major force in AI after the US and China. Late last year, Humain, its AI-powered operating systems firm, announced a $3 billion deal with private equity firm Blackstone to construct up to six gigawatts of data centre capacity nationwide by 2034, in partnership with Nvidia, AMD, Amazon Web Services, Qualcomm, and Cisco.

For the GCC, which has invested heavily in related education and training, the imperative now is for AI adoption to reach scale at the company level in order to maximize its contribution to sustainable economic growth.