Beyond Oil: The UAE’s Next Power Source is AI

July, 2025

AI is the new oil, and the UAE isn’t just drilling; it’s building the well. The UAE National Strategy for Artificial Intelligence 2031 exemplifies visionary leadership in the digital age, fusing bold ambition with a human-centric mission. The strategy positions AI not just as a lever for efficiency, but as a transformative force to improve health, safety, education, and environmental outcomes. Achieving this vision will require a long-term commitment from the government, dynamic public-private collaborations, and enterprises shifting from experimentation to AI-first operations that deliver measurable value.

Historical Context and Visionary Leadership: A Timeline of Progress

The UAE’s journey toward AI leadership has been both deliberate and accelerated. Long before the global AI wave gained momentum, the UAE laid the groundwork through its visionary National AI Strategy, positioning itself as a frontrunner in the global race to AI maturity. This early-mover advantage, bolstered by initiatives such as Dubai AI Week and cross-ministerial AI councils, is now accelerating AI deployment across diverse sectors, from healthcare and transport to energy and education. The transformation began in the early 2010s with initiatives such as Smart Dubai, laying the digital foundations through interconnected data systems, city-wide IoT, and citizen-facing platforms, that later enabled the integration of AI across public services and urban infrastructure. Over the past five years, the country has shifted from foundational digital infrastructure to a full-scale, AI-driven national movement. This evolution has been marked not only by forward-looking policies but by sustained investments, purpose-built institutions, and tangible, citizen-focused outcomes. At each stage, the UAE has methodically added new layers of capacity, from connectivity and data frameworks to talent pipelines and national innovation challenges, creating a robust ecosystem built for long-term impact.

The Figure 1 timeline below reflects this evolution—from aspiration, to structure, to measurable outcomes:

Picture1 1 - Beyond Oil: The UAE’s Next Power Source is AI Figure 1: Milestones in UAE’s AI and digital transformation journey (2013–2025)

This progression underlines the UAE’s ability to translate policy into action, and action into outcomes, creating a model that few digital-first nations have achieved at this scale and speed.

Strategic Objectives of the UAE AI 2031 Strategy

The UAE AI Strategy is grounded in an ethos of purposeful innovation. The eight strategic objectives described below are designed to translate national ambition into meaningful citizen outcomes, economic resilience, and long-term innovation leadership. These objectives are not standalone goals—they are part of an interconnected system backed by policy, funding, and federal-emirate coordination. Each objective contributes to a larger vision of an AI-first nation:

Picture2 1 1 1030x427 - Beyond Oil: The UAE’s Next Power Source is AI Figure 2: Core objectives guiding the UAE’s AI ambitions for 2031

Together, these objectives reflect a balanced approach: one that leverages AI to create economic competitiveness, address societal needs, and build a sustainable innovation ecosystem. The UAE’s AI and Blockchain Council, composed of representatives from federal and emirate-level bodies, ensures that these objectives are translated into actionable programs, regulations, and public-private collaborations.

Pillars of the UAE AI Strategy

These objectives are operationalized through four integrated pillars, each focused on a distinct but complementary dimension of the AI transformation journey:

    • AI in government and public services: The UAE is integrating AI across government departments to enhance public services, from visa processing and court prioritization to predictive policing and smart city planning. These AI applications aim to make governance more responsive, efficient, and deeply embedded in citizens’ lives.
    • AI-driven socio-economic transformation: The UAE is redesigning systems to tackle major societal challenges by using AI, including chronic diseases, traffic accidents, air pollution, and education gaps. Its mission-driven programs offer expert mentorship, data access, funding, and fast-tracked regulation to scale impactful solutions.
    • Talent, data, and R&D infrastructure: The UAE’s AI strategy emphasizes human capital development through initiatives such as AI Summer Camp, global academic partnerships, and MBZUAI expansion. Simultaneously, it invests in data infrastructure, interoperable databases, standardized governance, and open datasets, ensuring both talent and technology drive a sustainable AI economy.
    • AI governance, ethics, and interoperability: To address AI risks such as bias and misinformation, the UAE is implementing ethical governance early. Measures include regulatory sandboxes, transparency in public-sector AI, and ethics committees. A unified framework across emirates ensures consistent, responsible, and seamless AI-driven citizen experiences nationwide.

The Government Has Set the Stage—Will Private Sector Enterprises Take the Lead?

While the UAE government has laid a robust foundation, backed by funding, governance frameworks, and nationwide infrastructure, it is the private sector that must now catalyze this vision into action. The next phase of the UAE’s AI journey hinges on whether enterprises can align with national priorities and evolve from fragmented pilots to integrated, AI-first models that deliver measurable outcomes. This is not just a growth opportunity; it is a national imperative.

As highlighted in Avasant’s Gulf Cooperation Council (GCC) Region Digital Services 2025 Market Insights™, the GCC region is on the cusp of rapid AI-driven growth, with more than 85% of UAE enterprises making substantial AI investments in the first half of CY 2025. This signals a clear shift from experimentation to institutional adoption, further emphasizing the need for coherent, enterprise-wide AI strategies aligned with national priorities and core business objectives.

Several UAE enterprises are already moving in this direction. Etisalat is using AI to detect and prevent fraud in real time by analyzing anomalies across its vast telecom network. ADNOC, the national oil company, is embedding AI in its upstream operations to predict equipment failure and optimize drilling, resulting in both cost savings and improved safety. These are not isolated pilots; they reflect AI’s integration into core operations, with measurable ROI and strategic alignment. The table below illustrates the difference between scattered efforts and scaled outcomes:

Pilot-driven approach Coherent AI strategy
Isolated chatbot or analytics tool End-to-end AI-infused customer experience
Lack of ROI tracking Defined KPIs and business case for each use case
Ad-hoc data collection Enterprise-wide data governance and integration
Siloed innovation teams Cross-functional collaboration with AI embedded in workflows
Ethics as an afterthought Responsible AI frameworks embedded from the start

 

From Strategy to Execution: The Rise of AI-First Enterprises

To become truly AI-first, enterprises must go beyond technology adoption to operating model transformation. This includes:

    • Modernizing legacy systems with cloud-native, AI-infused architectures
    • Embedding AI into decisions, workflows, and customer experiences
    • Fostering a culture of experimentation, measurement, and iteration
    • Engaging in government-led AI challenges and open innovation platforms
    • Sharing non-sensitive data to enhance collective model performance

Global Reflections: Lessons for Emerging Digital Economies

The UAE’s AI journey is more than a national achievement; it is an actionable playbook for countries aiming to leapfrog into the digital future. For emerging economies such as India, Saudi Arabia, Egypt, and Indonesia, the UAE offers a compelling model of how to translate vision into execution. Its success lies not just in setting ambitious goals but in building the mechanisms to deliver them through empowered leadership, coordinated governance, long-term investment, and industry-wide engagement. The message is clear: digital maturity is not a privilege of size or wealth, but of strategic clarity and disciplined execution.

Countries seeking to replicate the UAE’s momentum must focus on a few foundational imperatives: establishing strong national leadership and cross-ministerial AI councils, building robust digital and data infrastructure, embedding ethics and transparency from the start, cocreating solutions with the private sector, and nurturing domestic talent pipelines through targeted education and reskilling initiatives. While each nation must tailor its AI strategy to its unique context, the UAE demonstrates that with speed, clarity, and accountability, governments can become active architects of an AI-powered future, not just regulators of it. The lesson isn’t to copy the UAE’s strategy, but to adopt its mindset: bold, integrated, and relentlessly execution-focused.

The Road Ahead: From Vision to Impact

By 2031, the UAE’s AI journey will not be judged by pilot counts or investment tallies, but by how meaningfully it improves lives, whether it’s reducing chronic illnesses with AI diagnostics, cutting traffic deaths through predictive mobility systems, or elevating education via personalized learning tools. These are not futuristic promises; they are measurable outcomes already taking root. The UAE’s AI strategy is not just building pipelines of talent, data, and technology; it is laying claim to a new economic engine, just as the UAE once did with oil. But unlike oil, this engine is decentralized and dynamic, powered by collaboration, trust, and adaptability.

For enterprises, the imperative is clear: move beyond isolated pilots and build AI into the heart of operations. They must engage with national platforms, adopt responsible AI frameworks, and invest in systems that create a durable advantage, not just dashboards. Unlike oil, in this race to AI maturity, the UAE is not merely buying the well. It is building it, layer by layer. The question for enterprises isn’t just how to participate, but whether they are ready to co-own the future.


By Saugata Sengupta, Partner and UAE Country Lead, Avasant, and Vishal Garg, Principal Analyst, Avasant