An article by Matt Spriegel, the Founder and CEO of Atiom

The United Arab Emirates has spent the past decade positioning itself as one of the world’s most forward-leaning adopters of artificial intelligence. In 2017 it launched the region’s first Ministry of AI, and its National Strategy for Artificial Intelligence 2031 outlines an ambition to integrate AI across every critical sector. For the UAE, AI is not merely an economic enabler but a foundational pillar of its future.

Yet as the country pushes toward its AI-driven vision, businesses face a more nuanced reality. The economic environment provides powerful tailwinds that accelerate innovation but also introduces operational headwinds. AI is becoming table stakes, new categories of work are emerging, and entirely new risks are surfacing. This moment represents both a major opportunity and a critical inflection point for UAE enterprises.

An ecosystem built for acceleration — but not without friction

Few markets offer the structural advantages the UAE provides to AI innovators. Government incentives, free-zone ecosystems, and regulatory sandboxes make experimentation and scaling easier. Foreign investment in advanced technology continues to grow, and the country is increasingly serving as a testbed for generative AI, predictive analytics, and automation.

This ecosystem has delivered results. An estimated 76 percent of UAE enterprises now use AI systems tailored to their industry, and the domestic AI market is forecast to grow at 26 percent annually, reaching approximately $4.74 billion by 2031. AI is no longer a discretionary upgrade; for many organisations, it is becoming core infrastructure.

However, these advantages coexist with operational pressures. Data-intensive AI systems require significant compute power, cloud infrastructure, and cybersecurity safeguards. Model training, vendor contracts, and specialist talent recruitment can materially increase operating costs, particularly for SMEs. Many organisations are discovering that adopting AI requires strategic, financial, and organisational transformation, not simply a technology purchase.

The execution gap: risks beneath the surface

AI adoption is often framed as inevitable, and in many sectors it is. But inevitability does not eliminate risk.

Over-automation can weaken customer experience. Companies that move too quickly toward automation at the expense of human connection risk eroding service quality. In a service-driven economy such as the UAE’s, where hospitality, tourism, and luxury retail remain central, operational efficiency cannot come at the cost of customer loyalty.

Legal and reputational exposure also increases when AI systems rely on biased, incomplete, or unverified data. Without transparent governance frameworks, businesses may expose themselves to regulatory scrutiny or customer backlash.

Vendor dependency presents another challenge. Organisations that implement tools without fully understanding their technical architecture risk long-term reliance on consultants and external providers, limiting internal capability development and increasing vulnerability.

Cybersecurity adds further complexity. While AI strengthens defensive capabilities, it simultaneously equips malicious actors with more advanced tools. As AI capability increases, so too does the threat landscape.

In a highly competitive environment, the benefits of early adoption are significant. But so are the consequences of careless execution.

Redefining work in an AI economy

AI is not only transforming industries; it is reshaping the workforce. As AI becomes embedded across the UAE economy, new job families are emerging: AI Operations Leads, Prompt Architects, AI Interaction Designers, AI Risk and Ethics Officers, Data Stewardship and Clean-Data Engineers, and Workforce Transformation Strategists.

This shift does not signal the elimination of human work, but its evolution. Roles requiring empathy, decision-making, cultural intelligence, and service orientation may become more valuable, not less. In a diverse, service-led economy such as the UAE’s, this balance between automation and human expertise will be central to long-term competitiveness.

The cost question: scaling AI responsibly

While AI promises efficiency and cost optimisation, its upfront and recurring costs remain substantial. Training programs and advanced models demand high compute and cloud infrastructure investment. Integrating legacy systems into AI workflows can introduce significant complexity and expense. Meanwhile, AI engineers and data scientists command premium salaries, and the ongoing costs of cybersecurity, compliance, and governance are unlikely to diminish.

As a result, many organisations are shifting toward hybrid or off-the-shelf generative AI solutions. These systems are more cost-effective, faster to deploy, and require less internal technical depth. The trade-off, however, lies in long-term differentiation and internal capability building.

The path forward

AI is emerging as one of the UAE’s most powerful economic multipliers but also one of its most complex operational challenges. The companies that succeed will treat AI adoption as a leadership and cultural transformation rather than a standalone technology upgrade. They will invest in workforce reskilling, human-centric service models, and strong governance frameworks from the outset.

The UAE has the ambition, structure, and momentum to position itself as a global AI powerhouse. The true differentiator, however, will not be how much AI companies adopt, but how intelligently and responsibly they embed it into their operations.

AI is not a one-time project. It is a continuous learning process. And in the UAE’s rapidly evolving economy, the organisations that approach it with discipline, clarity, and long-term thinking will define the next phase of growth.