Opportunities in the UAE and Saudi Arabia’s Technology Markets

Driven by state-led digital agendas, the UAE and Saudi Arabia are emerging as the Gulf’s most dynamic technology markets, with strong demand across AI, cloud, cybersecurity, and fintech underpinned by government investment and regulatory reform. 

The UAE and Saudi Arabia are rapidly reshaping their economies through large-scale, government-led digital transformation, positioning technology as a central pillar of growth and diversification.

Backed by ambitious national strategies and substantial public investment, both markets are creating significant opportunities, alongside new strategic considerations, for foreign technology companies seeking to enter or scale in the Gulf.

Government-led digital transformation as a market catalyst

National strategies driving technology demand

At the core of Saudi Arabia’s technology market growth is Vision 2030, the Kingdom’s flagship economic diversification blueprint, which embeds digital transformation as a strategic priority. Vision 2030’s programs support extensive digitalisation across government, infrastructure, and services, with technology adoption integral to national development goals.

Under this framework, Saudi Arabia’s National Strategy for Data & Artificial Intelligence is targeting SAR 75 billion (US$ 20) billion in AI investments by 2030 and positioning the Kingdom among the world’s leading AI adopters. This focus has driven nationwide digital capacity building and the training of tens of thousands of professionals.

Saudi Arabia’s ICT sector is one of the fastest-growing in the Middle East, with sector value estimated at over US$40.9 billion in 2023 and expanding at an estimated 22.7 percent annual growth rate, reflecting strong digital demand across healthcare, finance, smart infrastructure and logistics.

In the UAE the Digital Economy Strategy aims to nearly double the digital economy’s contribution to GDP from under 10 percent in the early 2020s to approximately 19.4 percent, serving as a cornerstone of the country’s non-oil growth agenda. The strategy prioritises AI, cloud computing and digital services while reinforcing public-private collaboration to build advanced technological capacity.

Together, these national strategies create predictable, government-backed demand for technology solutions and investment opportunities, and signal clear political commitment to digital transformation.

Role of public sector and state-owned enterprises

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In both Saudi Arabia and the UAE, the public sector and state-owned enterprises are anchor customers for advanced digital systems. Governments not only mandate digital adoption across national programmes but also act as large-scale purchasers of AI, cloud, cybersecurity and smart infrastructure technologies. This reduces market risk and accelerates commercialisation by offering long-term contracts and significant funding.

Saudi giga-projects, such as NEOM, The Red Sea Project, Qiddiya and King Salman Park, reinforce this trend by embedding technology at the core of planning and operations. These developments generate continuous demand for sensors, robotics, data analytics, and secure connectivity as part of broader efforts to modernise urban services and enhance livability.

High-growth technology sectors and commercial opportunities

AI and automation

AI is moving from pilot projects to scaled deployment across both markets because it is embedded in national digital agendas and public-sector delivery. Commercially, the most bankable opportunities sit in “enterprise-grade AI” rather than consumer apps: decision-support systems for ministries and regulators, document and case management automation, Arabic-language customer service and contact-center automation, predictive maintenance for infrastructure operators, and AI-enabled analytics for healthcare and logistics.

Saudi Arabia’s LEAP conference has also become a visible channel for investment signalling and deal-making: Reuters reported US$14.9 billion in new AI investments announced at LEAP 2025, illustrating the scale of capital being mobilised around AI infrastructure and applications.

In the UAE, national AI policy frames priority sectors and directs government adoption. The UAE National Strategy for Artificial Intelligence 2031 emphasises deploying AI across government services and building the data and infrastructure needed to position the UAE as an AI test bed, while related official strategy material highlights priority domains such as healthcare, logistics, energy, tourism, and cybersecurity.

For vendors, this supports near-term demand for packaged AI solutions that can be implemented quickly under public-sector governance requirements, particularly where strong controls, auditability, and model risk management are required.

Cloud computing, data infrastructure, and cybersecurity

Cloud growth in Saudi Arabia and the UAE is being shaped by two parallel forces: rapid digitisation and a stronger insistence on data sovereignty and regulated hosting for sensitive workloads. Saudi Arabia’s Cloud First Policy, issued by the Ministry of Communications and Information Technology, sets the direction for public entities to prioritise cloud where feasible, which continues to pull enterprise workloads into local and regional cloud environments.

As a result, hyperscalers and major providers have expanded local footprints: Google Cloud has scaled services in Saudi Arabia with an emphasis on data sovereignty, and the company opened a cloud region in Dammam to support low-latency, in-country workloads.

Oracle has long operated a Saudi cloud region (Jeddah) and opened a second public cloud region in Riyadh in 2024, tied to a broader investment plan.

In the UAE, hyperscale capacity expansion is accelerating in tandem with AI ambitions. Reuters reported that Microsoft and Abu Dhabi’s G42 announced a 200-megawatt data centre capacity expansion, aligned with a wider multi-year investment plan to strengthen sovereign-style AI and cloud infrastructure.

AWS’ Middle East (UAE) Region, with three Availability Zones, is another anchor for localisation strategies, enabling regulated industries to host data locally while serving regional customers. For service providers, this environment creates durable demand for cloud migration, managed cloud operations, FinOps, data platform modernisation, and integration services, especially for government-related entities and regulated sectors that must meet hosting and security requirements.

Cybersecurity is a direct beneficiary of this cloud-and-data expansion. Saudi Arabia’s National Cybersecurity Authority reported that the Kingdom’s cybersecurity market reached SAR 15.2 billion (US$4.05 billion) in 2024, up 14 percent year-on-year, with public-sector spending of SAR 4.8 billion (US$1.28 billion).

Fintech, digital payments, and smart financial services

Fintech growth in both markets is being enabled by regulator-led experimentation frameworks and rapid consumer adoption of digital payments. Saudi Arabia’s central bank (SAMA) launched its Regulatory Sandbox in 2018 to test innovative financial products and services under supervisory guidance, an important mechanism for market entry and controlled scaling.

Adoption metrics indicate a market that is increasingly “digital by default”: SAMA reported that electronic payments accounted for 79 percent of total retail payments in 2024, with 12.6 billion non-cash transactions (up from 10.8 billion in 2023).

In the UAE, sandbox and innovation pathways are more decentralised but mature: the official UAE platform summarises the country’s regulatory sandbox landscape, including ADGM’s RegLab, which provides a controlled environment for fintech testing under regulator engagement.

In Dubai, the DIFC regulator (DFSA) runs the Innovation Testing Licence programme to allow firms to test innovative financial products and business models in a licensed sandbox setting, supporting structured experimentation before full authorisation.

Implications for foreign startups and scale-ups

Market entry strategies in the UAE and Saudi Arabia vary significantly depending on a company’s stage of development. While both markets offer substantial opportunities, early-stage startups and growth-stage scale-ups face different risk profiles, regulatory demands, and commercial dynamics.

• For early-stage startups, the UAE typically provides a more accessible entry point. Its mature private-sector ecosystem, extensive free zone infrastructure, and established regulatory sandboxes allow young companies to test products, secure early customers, and refine business models with relatively low upfront costs. Fintech, SaaS, and platform-based startups in particular benefit from the UAE’s predictable licensing environment and access to regional investors. As a result, many foreign startups use the UAE as a launchpad while building relationships and monitoring regulatory developments in Saudi Arabia.
• For growth-stage companies and scale-ups, Saudi Arabia becomes increasingly attractive. Firms with proven products and the capacity to deliver at scale are well positioned to engage with public-sector procurement, state-owned enterprises, and giga-projects linked to Vision 2030. These opportunities can generate substantial, long-term revenues but require localization of operations, workforce planning, and alignment with national priorities.

Strategic considerations for foreign companies

Choosing between the UAE and Saudi Arabia

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For foreign technology companies, choosing between the United Arab Emirates and Saudi Arabia is less about selecting a single destination and more about sequencing and strategic fit. The UAE offers a smaller but more mature market, characterized by faster execution, relatively predictable regulation, and strong private-sector demand. It is particularly attractive for enterprise software, fintech, and cloud-based services that rely on rapid deployment and regional scalability.

Saudi Arabia, by contrast, presents a larger and faster-growing market with significantly higher revenue potential, especially in infrastructure-heavy and government-linked technology segments such as AI, smart cities, cybersecurity, and industrial digitalization. However, this comes with longer procurement cycles, evolving regulatory frameworks, and higher expectations around localization and alignment with national priorities. The risk-return trade-off is therefore more pronounced: higher upfront investment and complexity in exchange for larger, longer-term contracts.

Structuring market entry and partnerships

Across both markets, partnerships play a central role in successful market entry. Joint ventures with local firms, strategic alliances with system integrators, and direct engagement with government entities are common pathways, particularly in Saudi Arabia where public-sector procurement dominates demand. Establishing a locally licensed entity is often necessary to access major contracts and demonstrate long-term commitment.

Aligning commercial strategies with national objectives is equally critical. Technologies that can be positioned as supporting digital government, local capacity building, sustainability, or economic diversification tend to progress more quickly through approval and procurement processes. This requires foreign companies to adapt not only their operating models but also their value propositions to local policy priorities.

Outlook: The next phase of Gulf tech growth

Looking ahead, regulatory frameworks in both markets are expected to continue evolving toward greater clarity, particularly in areas such as data governance, AI, and cloud services. While state-driven innovation will remain a defining feature, long-term sustainability will depend on deeper private-sector participation and the maturation of local ecosystems.

As gateways between Asia, Europe, and Africa, the UAE and Saudi Arabia are likely to consolidate their roles as regional technology hubs, offering foreign companies a platform for both local growth and broader regional expansion.

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