The Middle East is about to go through an important decade. Around the world, large amounts of money are moving as global systems change due to political uncertainty, trade issues, competition in AI, and the increasing effects of climate change.
Traditional industries are beginning to overlap, changing how we travel, build, get energy, look after our health, and stay connected.
The region needs to act fast to turn these advantages into lasting growth. For tech startups, this means exciting opportunities to create new ideas and solutions that can grow fast and make a real difference.
According to PwC’s recent Value in Motion for the Middle East report, the region’s economy could grow to $4.57 trillion by 2035, about $1 trillion larger than today. A key driver of this growth will be AI, which could add $232 billion in economic value by 2035.
These numbers aren’t just hopeful predictions. They show the huge opportunities and responsibilities ahead for tech startups and investors in the region.
The UAE’s AI leadership
Nowhere is this more relevant than in the UAE, which has a national strategy to become a global leader in AI by 2031. The country also plays an active role internationally, helping shape global rules and standards for how AI is used.
On the ground, the progress is clear. Abu Dhabi’s global technology ecosystem, Hub71, now hosts 52 AI-focused startups after attracting 13 more in the first half of 2025.
Meanwhile, research from LinkedIn shows that AI usage in the workplace has surged from 56% in 2024 to 80% this year, with 77% of professionals believing AI improves daily work.
The UAE is also preparing the next generation. The new school season started with even kindergartens teaching coding, augmented reality, and AI to prepare pupils for a digital future.
Promise of AI and emerging technologies
AI has enormous potential in the Middle East to help businesses run more smoothly and grow quicker. Startups that create smart AI tools and use them in finance, logistics, or energy can gain a huge advantage.
Regional CEOs have growing confidence in AI. PwC research shows about half say they trust it to a “large” or “very large” extent, which is higher than the global average. This trust is paying off: nearly 70% of regional CEOs using generative AI say it saved them time, and over half saw bigger profits.
Looking ahead, AI is set to become a core part of how businesses run and develop new products in the region. This is pushing companies to innovate quickly. More than half have launched new products in the last five years, and 40% have entered new industries to grow.
Among those leading the way, Careem in the UAE has grown from a ride-hailing app into food delivery, digital payments, and remittances, using AI to make its super app faster, safer, and more useful.
In Abu Dhabi, AI and cloud computing company G42 and Mubadala merged their healthcare assets to form M42, aiming to transform healthcare with world-class, tech-enabled, patient-focused care.
In Saudi Arabia, Aramco has teamed up with Chinese electric vehicle maker BYD to develop new-energy vehicle technologies. These examples show how transport, healthcare, and energy are working together to create new opportunities.
Careem’s shift to becoming an AI-first company has been transformative, with much still ahead. AI now gives accurate arrival times by factoring in traffic, weather, prayer times, and even iftar during Ramadan. It adjusts prices based on demand, finds quicker routes, suggests food and ride options, and flags suspicious activity. It also boosts safety by verifying drivers and detecting fraud.
Careem’s experts are developing new AI ideas, training staff to use them, and running programmes for graduates to build the next generation of AI talent.
Climate risk and the innovation imperative
The Middle East’s economic future depends a lot on how it handles climate risks. The PwC report makes clear that the economic impact of climate change could be serious, but it also highlights a big opportunity: by acting now, the region can protect long-term growth and open up new areas of value.
This creates opportunities for startups to help with sustainability by developing technologies that reduce environmental harm and help industries prepare for climate change.
Industries are blending
As highlighted by the PwC report, different industries are beginning to overlap. The old lines that separated sectors like transport, construction, energy, healthcare, and communication are fading. This is changing the way the region works, builds, powers itself, and looks after people.
For startups, this means big opportunities. When industries mix, it creates room for new ideas. A startup could use technology to improve how we deliver services or find smarter ways to manage energy and transport. The more flexible and creative a startup is across different fields, the more likely it is to grow and succeed.
Talent a key to success
These opportunities depend on talent. To get the most from AI and industry changes, the region needs to train its workers with new skills. Startups will be important here, not just by needing new skills themselves, but by helping create those skills through innovation and teamwork.
For investors and entrepreneurs, helping develop talent will be as important as funding new products. The region’s ability to compete globally will depend on building strong foundations for its workforce to adapt and thrive.
Staying ahead of the curve
The Middle East faces a decade of rapid change. For startups, success means more than reacting; it requires spotting trends early and leading innovation. Flexibility is vital, in adapting to shifts in technology, customer needs, and government priorities.
Entrepreneurs who embrace change, take calculated risks, and form strong partnerships will stand out. In this fast-moving landscape, the ability to adapt and grow quickly will define success. Those who act now will be best placed to shape the future and capture the opportunities ahead.
The road ahead for startups and investors
Growth will depend on how well AI is harnessed, climate risks managed, and industries connected. For startups and investors, this is a time to lead.
AI-driven tools, sustainable solutions, and flexible business models can open new markets. But investors must go further than funding, offering the long-term support needed for startups to scale and adapt.
As a founder and investor, I see strong potential in this approach. With the right focus, the Middle East can build a startup ecosystem that delivers lasting value.
