The artificial intelligence SMEs ecosystem in the UAE: overcoming challenges, expanding horizons

Abstract

The global AI landscape is undergoing rapid transformation. With generative AI applications propelling adoption across industries, nations are racing to harness AI for competitive advantage. The United Arab Emirates (UAE), once a regional pioneer, now ranks as a top-tier global AI nation, achieving high global rankings in AI readiness and ecosystem vibrancy—ranking 5th globally in Stanford’s AI Vibrancy Index and 13th in the Oxford Government AI Readiness Index. This UAE special edition report explores how the country’s AI startup ecosystem is evolving and how SMEs—who represent over 94% of the UAE’s companies and 60% of its non-oil GDP—are adopting AI tools, navigating infrastructure and regulatory landscapes, and driving innovation. During the past five years, the UAE government developed extensive incentive frameworks and safety nets for SMEs and startups, including specifically those operating in digital domains. This report draws on primary fieldwork of 81 UAE-based AI and digital SMEs, constituting 25.1% of a MENA-wide sample of 327 firms, offering a uniquely detailed picture of the UAE’s AI readiness at the ground level. The findings provide a comprehensive picture of how small and medium enterprises (SMEs) are developing, adopting, and implementing AI across the UAE.