Building on the bubble: Middle East AI

As Saudi Arabia and the UAE race to become global AI leaders, the region is witnessing a rapid, high-stakes transformation that is reshaping industries, legal systems and the future of innovation. 

In 2025, it was almost impossible to speak to anyone in the Middle East without at least a single mention of artificial intelligence. What is on everyone’s minds, e-mails, and social media feeds is, of course, not the sort of artificial intelligence that helps doctors detect cancer, but rather generative AI or large language models (LLMs), which are deep-learning models trained on amounts of data so vast that it enables them to generate a natural conversation and assist with a wide range of tasks. The generative aspect of it is borne from its capability to create “original” content such as text, audio, video, pictures, or code. Of course, it is immediately apparent that a model trained on immense amounts of data scraped from every corner of the internet will not create genuinely original content from thin air, but rather what is for all intents and purposes an imitation, which has caused quite a few issues in creative spaces due to intellectual property implications. 

Since late 2023, generative AI (GenAI) has enjoyed a meteoric rise, with its use in the workplace nearly doubling from 33% in 2023 to 71% in 2024 according to a recent McKinsey survey. While the reason for such speed in its adoption remains debatable, it has been posited that it may be due to its low adoption costs and consumer focus compared to other ground-breaking technologies such as PCs and the internet. In the workplace, GenAI is being used mainly to write communications, search for information, translate, and assist with or perform administrative tasks, according to a report by the Federal Reserve Bank of St. Louis. 

This fast, wide-spread adoption of GenAI tools in the workplace has not left the legal field untouched; in fact, it has become apparent that law firms are on the receiving end of client queries not only about the implications of GenAI in their own sectors and backyards, but also about the law firms’ own implementation of AI tools and what that means for legal costs. This very topic was discussed by the panel of speakers in the recent webinar launch for Chambers Global 2026. 

In the earlier days of GenAI adoption, there were more pressing doubts about the accuracy of models such as ChatGPT, due to its tendency to produce fake or inaccurate content—so called “hallucinations”. More sophisticated models have since developed, such as  HarveyAI, which has been widely adopted by top law firms such as A&O Shearman and Macfarlanes. Anthropic, the company behind Claude, recently announced the release of a tool capable of automating legal work such as contract review, legal briefings and compliance workflows.  

From my conversations with both lawyers and their clients, it is clear that both sides are keeping in mind the implications for fee structures. It remains unclear whether AI can really do as good a job as a human lawyer, or whether it should; nevertheless, the internal adoption of AI is becoming a discriminant when it comes to law firm engagement and instruction. 

Middle East AI uptake has been particularly strong. A PwC survey has found that 75% of employees in the region use AI tools at work, above the global average of 69%. Even at the c-suite level, Middle East CEOs lead globally when it comes to the adoption of AI across a number of criteria. 

Saudi Arabia ranks 14th globally and first in the region for AI capacity, with a full score on the ‘Government Strategy’ criterion. This is unsurprising considering the Kingdom made AI a key part of its Vision 2030 agenda for economic diversification. The Saudi Arabia AI policy also established the Saudi Data & AI Authority (SDAIA), which is projected to add USD24 billion to the nation’s economy – equivalent to 2% of GDP.  

AI in the UAE is governed by the National AI Strategy 2031, overseen by a Minister of State for AI. Abu Dhabi declared its goal to be fully AI-powered by 2027, and Qatar committed USD2.5 billion to boosting AI capabilities under its Digital Agenda 2030.  

Bahrain also launched a National Policy on AI, which is focused on ethical innovation and the responsible use and development of artificial intelligence.  

Middle East AI adoption is being driven by a top-down approach, and the clear commitment of the region to becoming a hub for artificial intelligence and innovation. 

As usual, regulation lags behind the breakneck speed of these changes. While the GCC (Gulf Cooperation Council comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirate) countries are working on common ethical standards for AI use in government contexts, there isn’t much in the way of legal frameworks like the European Union’s AI Act, which focuses on safety and risk mitigation.  

The Middle East wants to be ahead of the race; places like Abu Dhabi are making a play for it by actively relocating relevant talent and fostering an immigration-friendly environment.  The welcoming environment and the balance between complying with international standards and maintaining a relatively relaxed regulatory environment are conducive to the region becoming a hub for innovation.  

The AI environment is fertile, but there remain several challenges. There’s the difficulty in attracting, or even home-growing, enough skilled talent to keep up with the extraordinary demand and rapid pace of adoption. Then there’s the relative uncertainty that remains around the management of security risks and AI’s impact on organisational realities.

Looking at the legal industry, it’s clear that while firms keeping up to speed with developments and remain on the cutting edge of progress, a proper Middle East AI specialism has yet to emerge. From a deal perspective, AI is software, and its existence and impact cuts through many areas of law, including intellectual property, data protection and privacy, employment, dispute resolution and transactional.  

From this perspective, AI in UAE and beyond might simply continue to be approached through the lens of existing cloud computing and software regulation rather than growing into its own separate area of specialism. It will be interesting, in that sense, to understand whether lawyers who are looking into building expertise specific to AI would be better off specialising in this niche or sticking to a broad, cross-field expertise that might more efficiently tackle future challenges.

On the other hand, an interestingly brick-and-mortar trend can be observed in Middle East AI deals: the financing, development and construction of the necessary infrastructure for AI scaling, namely data centres. The data centre market in the Middle East and Africa region was valued at around USD8 billion in 2024 and projected to reach USD19 billion by 2030. Forbes even called it “the digital oil”. 

Large-scale deals are already happening; Abu Dhabi technology giant G42 is set to develop multiple data centres as part of its Stargate project together with OpenAI, Cisco and Nvidia among others. Saudi Arabia’s PIF has launched Humain, an AI company poised to build several AI factories. It is a nascent area of work, but one that is accumulating a lot of momentum, and appears to be one of the more solid avenues for lawyers looking to build a specialist focus on AI-related work. 

However, data centres pose unavoidable environmental implications, producing significant carbon emissions, and requiring massive amounts of energy and water to operate and cool. In 2024, data centres made up 1.5% of the electricity consumption globally, and in areas where they are based, the population has experienced power outages because of the gap between demand and grid capacity. 

In the Middle East, this issue is compounded by the much greater cooling requirements due to the hot temperatures and the water shortages in the region. GCC countries have made commitments to sustainability, such as UAE’s Net Zero 2050 and the Saudi Green Initiative, and there have been significant efforts to diversify the region’s energy supply away from fossil fuels. However, the reliability of alternative energy sources such as hydrogen remains doubtful in terms of continuity of supply and operational costs, particularly given the tremendous surge in demand.  

The GCC region continues to put itself forward as a hub for innovation. The hope is that Middle East AI players will use their potential for creating disruptive solutions to become a player in the global market. And to do so in a way that goes beyond the “bubble”, setting a new standard in truly sustainable innovation.

As the Middle East accelerates its AI‑driven transformation, the region is not only reshaping industries and legal frameworks but also adopting strategies to position itself as a global hub for innovation. These developments mirror wider international trends highlighted in the Chambers Global Guide 2026, where the evolving regulatory environment and the growing role of AI were identified as defining forces shaping the future of legal practice.

For deep insights into the Middle East legal environment look no further than the Chambers Global Guide Report 2026.  

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