Middle East in 2026 — From Oil to AI, How Gulf Nations Are Diversifying Beyond Petroleum

RIYADH — Gulf nations are accelerating their economic diversification strategies in 2026, with Saudi Arabia declaring 2026 as the 'Year of Artificial Intelligence' and investing over $14.9 billion in AI and digital infrastructure. The transition from oil dependency to knowledge-based economies is reshaping the entire Middle East region, with far-reaching implications for global markets.

Saudi Arabia's Vision 2030 remains the most ambitious diversification blueprint in the region. The Kingdom aims to attract SAR 75 billion (approximately $20 billion) in AI-related investments by 2030, has launched the Hexagon data centre — touted as the world's largest government-run data facility with 480 megawatts capacity — and inaugurated the Shaheen III supercomputer alongside a National Data Lake integrating over 430 government systems.

AI and Technology Investments

The Public Investment Fund (PIF) launched "HUMAIN" in May 2025, a national AI company focused on developing AI infrastructure and multimodal language models, including an Arabic AI system. Saudi Aramco has announced plans to acquire a significant minority stake in HUMAIN. By 2025, Saudi Arabia ranked 14th in the Global AI Index and holds the leading position in the Arab world for AI model development.

• Human Capital — Goal to train 20,000 AI and data specialists by 2030; over 11,000 already trained
• Global Partnerships — First Arab nation to join the Global Partnership on AI (GPAI)
• Infrastructure — Microsoft's Saudi Arabia data centre region expected available from Q4 2026

UAE's Ambitions

The UAE's National AI Strategy 2031 aims to position the country as a global AI leader. Plans include establishing a 5-gigawatt supercomputing complex — the "Stargate" project — in Abu Dhabi, with the initial 200MW expected operational later in 2026. The UAE intends to produce 60 trillion AI tokens, roughly 60 per cent of global production, through its Stargate data centre campus. By end of 2025, AI adoption among the working-age population in the UAE reached 64 per cent.

Qatar's AI Push

In December 2025, Qatar announced a sovereign AI company and a strategic partnership with Brookfield to co-develop AI infrastructure. Qatar's AI market is projected to reach approximately $60 million by 2026, and its National Skilling Program aims to train 50,000 individuals in AI and data science by 2025.

Oman and Kuwait

Oman continues to implement its National Programme for AI and Advanced Digital Technologies with OR15 million (approximately $39 million) allocated for AI in 2025. Kuwait's draft National AI Strategy outlines plans to establish an AI Centre of Excellence and launch pilot AI projects in key sectors.

Regional Economic Impact

AI is projected to contribute up to $320 billion to the Middle East's economy by 2030, with Saudi Arabia expected to see the largest absolute impact at $135.2 billion. The diversification drive is reducing Gulf states' reliance on oil and gas revenues, making their economies more resilient to global energy price fluctuations.

Implications for Pakistan

The Gulf's tech transformation presents significant opportunities for Pakistan's IT workforce and businesses. Growing demand for AI talent, data infrastructure, and digital services in the Gulf region, combined with strong people-to-people ties, positions Pakistan to benefit from this economic shift through IT exports and skilled diaspora engagement.