Middle East Organizations Embrace AI Despite Challenges: Deloitte and MBZUAI Report

Ummulkiram Pardawala -

A new report by Deloitte, in collaboration with the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), highlights the transformative potential and challenges of artificial intelligence (AI) adoption in the Middle East. The 2025 State of AI in the Middle East Report draws insights from over 150 business and technology leaders across the UAE, KSA, and Qatar, analyzing the region’s evolving AI landscape.

Rising Investments in AI

More than 65% of organizations in the Middle East plan to increase AI investments in the coming year, driven by opportunities in generative AI (GenAI), with one-third of organizations dedicating over 60% of their AI budgets to GenAI. This far surpasses global figures, where 72% of organizations spend less than 40% of their budgets on GenAI. Governments in the region, particularly in the UAE, are accelerating funding for AI infrastructure and talent development to position the GCC as a global leader in AI innovation.

Top Benefits and Challenges

AI adoption is primarily seen as a driver of productivity and efficiency, with 91% of respondents identifying these as transformational benefits. However, organizations face hurdles such as:

  • Talent shortages: Nearly 70% plan to increase headcount for AI roles, with a focus on upskilling and attracting AI graduates.
  • Technology selection: 34% struggle to identify the right AI tools for deployment.
  • Data security and compliance: Concerns around regulation compliance (67%) and data security (65%) are significant.
  • Governance readiness: While 63% of organizations feel prepared for risk and governance in AI, this drops to 41% for GenAI, exposing a gap in readiness.

Professor Sami Haddadin, MBZUAI’s Vice President for Research, emphasized the need to develop local AI specialists and practitioners while addressing privacy and ethical concerns. He highlighted MBZUAI’s initiatives, such as the Executive Program and Master in Applied AI, as pivotal in overcoming these challenges.

Sector Insights and AI Use Cases

Organizations are still in the early stages or proof-of-concept phases, with content generation and summarization emerging as leading AI use cases. However, many businesses struggle to align AI solutions with specific objectives, hindering return on investment (ROI).

Yousef Barkawie, AI & Data Leader at Deloitte Middle East, stressed the importance of analytical strategies to assess AI demand, supply, and enablement, adding that elevating decision-making frameworks at the boardroom level is crucial for scaling AI effectively.

Middle East AI Outlook

The region’s AI transformation reflects a shift toward knowledge-based economies, compelling businesses to rethink their operations. Despite challenges, the increasing focus on AI infrastructure, talent, and governance positions the Middle East as a key player in the global AI landscape.

To explore the full report and its findings, visit LINK.

News Source: Mohamed bin Zayed University of Artificial Intelligence (MBZUAI)