meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region plays high-stakes AI game

11 June 2024

This package also includes: Data centres meet upbeat growth

Artificial intelligence (AI) is a potential enabler for the economic diversification programmes of the GCC’s hydrocarbons-exporting states. 

The UAE launched an open-source large-language model (LLM) last year. Falcon 40B, shortly followed by Falcon 180B, cemented the reputation of the Abu Dhabi government-funded Technology Innovation Institute as a major player in generative AI.

With 180 billion parameters and trained on 3.5 trillion tokens, Falcon 180B soared to the top of the Hugging Face Leaderboard, a benchmark for pre-trained LLMs. Falcon 180B outperformed competitors such as Meta’s Llama 2 in areas including reasoning, coding, proficiency and knowledge tests.

The launch of Falcon followed cumulative investments in research, talent acquisition and digital infrastructure. In recent years, Abu Dhabi has formed government-attached agencies and commercial entities backed by its sovereign wealth funds to focus on AI.

One such company is G42, which has partnered with the US’ OpenAI to develop sector-focused generative AI models, and with Microsoft to run applications on Azure and undertake AI skilling initiatives in the UAE and beyond.

Global AI hubs

The UAE aims to become a world-leading AI hub alongside the US and China, but the country will have to tread carefully when choosing partners to avoid geopolitical complications involving its most important security ally and its largest energy client.

Riyadh seems determined to give Abu Dhabi a run for its AI money. The GCC region’s two largest states have placed
separate multimillion-dollar orders for graphics processing units – powerful chips designed for training AI – from top US supplier Nvidia.

They have also formed AI-focused investment vehicles with a view to maximising investments and returns from AI ventures at home and abroad. Abu Dhabi formed MGX, which aims to build $100bn in assets under management within a few years, while Saudi Arabia’s Public Investment Fund formed a $100bn platform to transform the kingdom into a semiconductor and electronics hub, with AI playing a central role in the plan.

In May this year, the Saudi Data & Artificial Intelligence Authority and New York-based technology company IBM launched an open-source Arabic LLM called Allam on IBM’s Watsonx AI and data platform.

With AI promising to be a $1tn market by 2030, it offers attractive opportunities

Computer power

A potential issue facing the determined push for AI leadership is that AI requires enormous computational power and energy, in addition to vast capital and talent.

A recent article published by the World Economic Forum (WEF) suggests that the computational power required to sustain the rise of AI doubles approximately every 100 days.

Related read: Global AI market to top $1tn in 2030

“The energy required to run AI tasks is already accelerating with an annual growth rate between 26% and 36%. This means by 2028, AI could be using more power than the entire country of Iceland used in 2021,” the WEF article says.

The AI lifecycle impacts the environment in two stages. First is the training phase, when the models learn and develop by digesting vast amounts of data; and second is the inference phase, when they solve real-world problems.

At present, the environmental footprint is split, with training responsible for about 20% and inference taking up 80%.

“As AI models gain traction across diverse sectors, the need for inference and its environmental footprint will escalate,” the WEF warns.

A peer-reviewed analysis in the science journal Joule says that a continuation of the current trends in AI capacity and adoption will likely result in Nvidia shipping 1.5 million AI server units a year by 2027.

When running at full capacity, these servers are expected to consume at least 85.4 terawatt-hours of electricity annually, which is equivalent to 100GW of installed capacity in the next three years.

Data centres, which make up the main AI digital infrastructure, already account for about 1%-1.5% of global electricity use.

In a hypothetical scenario in which everyone shifts to AI for mundane tasks such as performing searches on Google, every data centre would effectively experience a 10-fold increase in energy consumption, according to Alex De Vries, a data scientist at the Central Bank of the Netherlands, which conducted the analysis published by Joule.

As a result, the hydrocarbons-exporting and energy-transitioning GCC states – particularly the UAE and Saudi Arabia – appear to be a natural fit for AI, due to the presence of abundant and cheap fossil-fuel or renewable-energy resources, and the need to diversify their revenue sources away from oil. With AI promising to be a $1tn market by 2030, it offers attractive opportunities.

According to a Dubai-based senior executive with a global infrastructure investor, each country and company will eventually need to consider what part they can play in the AI value chain. 

Since Nvidia seems to have captured the microprocessor space, the other areas of opportunity are in developing computing power, algorithms and implementation. “Both Saudi Arabia and the UAE have the theoretical capability to grow into the computing power and implementation spaces, which require computing capacity through data centres and medium-skilled manpower to deploy, migrate, train and maintain [AI],” the executive says.

Greening AI

Policy adjustments could be needed to support such advances, especially when it comes to minimising AI’s carbon footprint, even as it enables the curbing of those in other sectors – including the power sector.

In addition to the vast computing and wattage requirements of AI, the region’s arid weather and very hot summer temperatures mean that regional data centres have greater cooling requirements.

To address this, the Dubai state utility has started to build a solar-powered data centre, which is understood to be the first of its kind in the world.

Saudi Arabia, which aims to have 58.7GW of renewable energy installed capacity by 2030 – accounting for about 50% of its electricity production mix – could follow a similar model. 

Abu Dhabi’s quantum computer project, in partnership with researchers at Spain’s Qilimanjaro Quantum Tech, is under way.

Unlike a classic supercomputer that operates on binary states, a quantum computer uses quantum mechanics phenomena including superposition and entanglement to generate and manipulate subatomic particles such as electrons or photons, or qubits. 

This allows greater processing powers that can enable the performance of complex calculations that would take much longer to be solved, consuming less power than a supercomputer.

The growing electricity surplus in Abu Dhabi, as all four reactors at the Barakah nuclear power plant come onstream this year, could also be allocated to data centres and AI applications.

In addition, Abu Dhabi’s plan to start procuring phase two of its Barakah nuclear energy plant may not only boost energy exports, but could also create sufficient margins to accommodate future AI computing demand.

Related read: Nuclear power will help region achieve AI ambitions

“I don’t know if that means only nuclear power can solve the demand, but it certainly is a good option and carries some strategic advantage as well,” says Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy.

While AI needs a significant amount of electricity for computations, there should be savings through productivity increases 

Efficiency gains

While it is difficult to accurately quantify and forecast AI’s overall carbon emissions, a holistic view of its overall environmental impact is required.

In theory, while AI itself needs a significant amount of electricity for computations, there should be savings through productivity increases. “Will people need to go to the office less often, and how about the improved performance of machines?” asks the Dubai-based infrastructure investor.

However, it is also important not to overstate AI’s potential benefits to the region’s economies. While AI could be a major driver of economic diversification, Young has yet to be convinced that it will significantly boost the GCC’s GDP growth.

Job creation is a vital element of economic diversification, she tells MEED, but AI is often used to replace roles in the service sector and lower-skilled opportunities, such as those in the retail banking sector. This could impact efforts under way in several GCC states to boost employment among citizens, such as the Saudi Nationalisation Programme and the UAE’s Emiratisation drive.

On the upside, however, AI can be very good at improving efficiencies in the oil and gas industry and the power sector, and at boosting productivity.

The need of the hour appears to be establishing a clear path towards efficient AI deployment, despite the fact that the results of the technology’s full-fledged implementation remain hard to ascertain. 

“The UAE is doing a lot to attract skilled people to provide more value-added services, but that is an organic process and needs a more vibrant ecosystem of education institutions – and companies establishing more than just sales offices – to be truly called a hub,” the infrastructure investor tells MEED. “Saudi Arabia is still a bit far from that.”

Data centres meet upbeat growth 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11887895/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Caution governs Jordanian bank lending

    12 June 2026

     

    In a region where geopolitical turbulence has amplified by an order of magnitude, Jordan is managing to stand out as a beacon of relative stability, with the Hashemite kingdom’s banking sector acting as a case in point.

    Lending has grown in recent years, with credit up by an average 4.9% between 2020 and 2025, according to the Central Bank of Jordan (CBJ) – a faster rate than average nominal GDP growth of 2.3% over the same period.

    The IMF took care to note an increase in credit to the private sector in its latest Article IV assessment of Jordan, standing at 80.1% of GDP at end-2024, compared to just 66.6% 10 years earlier.

    Banks in the kingdom ended 2025 in a liquid state, but caution remains the watchword for local lenders. The loan-to-deposit relationship bears that out. For that year, deposits ended up 7.1% to JD50bn ($70.5bn), while credit facilities were up just 3.7% to JD36.1bn ($50.9bn).

    Analysts see this as a case of Jordanian banks being prudent, given the tricky operating environment and limited lending opportunities, rather than banks being excessively defensive. 

    According to Christos Theofilou, an analyst at Moody’s Investors Service, it is cautious lending in fraught macroeconomic conditions.

    “On the one hand, we’ve seen a structurally strong and stable deposit base that has been growing more compared to lending. That indicates a certain degree of limited risk appetite, but also the fact that, given the challenging operating conditions, there were limited business opportunities in the market,” says Theofilou.

    Liquidity banked

    Jordan’s banks look able to withstand further shocks, given solid capital positions and relatively strong earnings performances. Arab Bank, the largest lender, saw net profits grow 12% last year to $1.13bn, despite a highly charged geopolitical situation across Jordan and the neighbouring Palestinian territories.

    As Moody’s notes, Jordanian banks’ funding base remains stable, with banks mainly deposit-funded – with deposits at 67% of total assets as of December 2025 – mostly comprising well-diversified retail deposits. The ratings agency noted that banks retain the capacity to increase lending without relying on more volatile and costly external funding, as indicated by the 72% loan-to-deposit ratio.

    The earnings outlook in Jordan may be better than other banking sectors in the immediate region, but this does not translate into a picture of booming profits going forward.

    “Profits should remain resilient, but we’re not expecting any significant improvement,” says Theofilou. “We have the challenging operating conditions, and the lower interest rates that have come down over the past few years. On the other hand, banks have had lower provisioning in the past 12 to 18 months compared to the period prior to that.”

    Asset quality remains a strong point, despite some weakening over recent years. Moody’s sees non-performing loans (NPLs) falling below 5.5% this year from 5.8% in June 2025.

    However, the continuing Iran conflict and its deleterious regional impacts – including on the West Bank, where about 9% of Jordanian banks’ loans are located – suggest that bank exposures to troubled sectors will require focus.

    Concentration bites

    Another challenge is the banks’ high credit concentration among large corporates, with a noted high exposure to real estate.

    Commercial and residential real estate loans accounted for 17.4% of total credit facilities as of year-end 2024, while residential mortgages accounted for 40.9% of household credit. Regulatory oversight may limit the impacts – the CBJ caps loans for real estate at 20% of local currency customer deposits.

    The real estate exposures are meaningful, but Moody’s views overall concentration risk as more material rather than real estate risk per se.

    “So, on the one hand, Jordanian banks have real estate loans, both commercial and residential, slightly below a fifth of the total credit facilities,” says Theofilou. “Banks also face challenges in quickly disposing of properties, but within the context of a relatively lengthy foreclosure process. On the flipside, we see Jordanian banks having fairly high collateralisation, so they do hold a lot of collateral against the real estate exposures.”

    The CBJ has earned plaudits for its regulatory oversight, with the IMF lauding its strengthening of the Financial Stability Committee, while refocusing its role on macroprudential policies and systemic risks. 

    Jordanian banks’ brisk uptake of digital technologies has also been a positive.

    Last year, digital payment systems in Jordan recorded over 184 million digital transactions, exceeding $38bn in value. The CBJ has introduced an AI regulatory framework for the sector and the authorities are now working to burnish the country’s credentials as a fintech hub, based on a 90% plus internet penetration. 

    In the year ahead, Jordanian banks will be looking to find exposures to new lending opportunities, given the past risk aversion that has prevented them from building stronger growth avenues.

    Projects beckon

    Big new infrastructure projects could yet come to the fore as bankable opportunities for local players. For example, the National Water Carrier Project, costed at $5.8bn and aiming to increase water supply by 40%, is looking to achieve financial close this summer. It is the type of project that could prove significant in helping diversify local lenders’ exposure away from real estate towards infrastructure.

    “If we see a lot of these infrastructure projects requiring financing coming to the market, then we could see a bit of a pickup in lending growth as well,” says Theofilou.

    New lending opportunities will come from large corporates and infrastructure-related lending. Those will play the key role in any significant pickup in credit growth, says the Moody’s analyst, in contrast to the small- and medium-enterprise (SME) sector, which poses a different challenge for banks.

    “The SME segment does represent a potential growth opportunity and it’s supported by policy focus, however its expansion is constrained by the operating environment. The sector is exposed to high overall credit risks, and when conditions are challenging, banks tend to be more cautious in lending to the SME markets,” says Theofilou.

    So long as the regional conflict persists, banks will be inclined more towards caution than exuberance in their lending approaches. And yet that strong and stable inclination may be what serves them best in a notably turbulent year in the Middle East’s recent history.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17204176/main.gif
    James Gavin
  • Oman tenders environmental survey consultancy contract

    12 June 2026

    Nama Power & Water Procurement Company (Nama PWP) has issued a tender seeking consultancy firms to provide environmental and seawater quality surveys under an ad hoc services contract.

    The selected consultants will be appointed for a four-year period and engaged on an as-needed basis to undertake environmental survey work.

    According to the tender notice, the scope of work includes environmental surveys, vertical profiling of seawater quality, seawater sampling and testing, environmental and social baseline studies, and bird and bat surveys.

    Bids are due by 1 July.

    Environmental and seawater studies are typically undertaken during the early development stages of power generation, desalination and other water infrastructure projects.

    Oman’s project pipeline includes a series of large-scale independent power projects (IPPs) scheduled for delivery between 2027 and 2031, according to the seven-year plan released by Nama PWP in March.

    Earlier in June, Nama PWP issued a supervisory consultancy tender for the 280MW Marsa solar IPP project in North Al-Batinah Governorate.

    The project is scheduled to enter commercial operation in the first quarter of 2028.

    The company is seeking project management and supervisory consultancy services during the construction, commissioning and testing phases of the project.

    The bid submission deadline is 26 July.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17209109/main.jpg
    Mark Dowdall
  • Emirates to offer passengers insurance amid travel warnings

    12 June 2026

    Dubai-based airline Emirates is to offer its own insurance product to passengers flying to or through Dubai, as it seeks to reassure travellers deterred by government advisories against travel to the region.

    The airline’s president, Tim Clark, confirmed the move in an interview with the London-based Financial Times. He said Emirates was working with insurance companies to introduce a “reasonably priced” product that would guarantee passengers could get home regardless of whether they returned on Emirates or another carrier.

    The move is designed to address concerns that travellers could become stranded if the conflict were to restart. More than three months after fighting began, several countries continue to maintain no-fly recommendations covering Gulf routes, leaving passengers unable to obtain conventional insurance for trips to or through the region.

    “I think one of the big concerns is that if they get caught overseas and they can’t get back,” Clark said. The group was working with insurance companies “to do the right thing”, he added.

    Emirates has played a leading role in supporting Dubai’s tourism sector since Iran began targeting the UAE with missiles and drones on 28 February.

    In early June, the Department of Economy and Tourism told stakeholders attending its bi-annual City Briefing that the emirate worked closely with airports and aviation partners, including Emirates and FlyDubai, to ensure continued connectivity for travellers.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17206867/main.jpg
  • Conflict to push global growth to post-pandemic low

    12 June 2026

    The ongoing conflict in the Middle East is expected to drag global economic growth to its lowest level since the Covid-19 pandemic, with Gulf states bearing the heaviest burden of any region, the World Bank Group has warned in its latest Global Economic Prospects report.

    Global growth is forecast to slow to 2.5% in 2026, down from 2.9% in 2025, with forecasts downgraded for two-thirds of economies. Economies in the Gulf directly affected by the conflict are expected to see growth collapse from 3.9% in 2025 to nearly zero this year, marking the steepest regional decline.

    The closure of the Strait of Hormuz has severely disrupted energy markets, with Brent crude prices projected to average $94 a barrel in 2026, 36% above 2025 levels, assuming the worst disruptions ease by July. Fertiliser price increases are compounding the pressure, feeding through to food prices and pushing global inflation to an expected 4.0% this year, up from 3.3% in 2025.

    The World Bank says downside risks remain substantial. Should energy supply disruptions prove more severe than currently assumed and be accompanied by significant financial stress, global growth could fall as low as 1.3% in 2026, with inflation climbing to 4.4%.

    The World Bank is making up to $50bn-$60bn immediately available through existing instruments, including $25bn in pre-arranged financing, to support affected countries through social safety nets, fiscal capacity and working capital for businesses. More than 30 countries are actively working with the bank to enhance readiness under the response plan. If the conflict and its economic fallout persist, support could be scaled to $80bn-$100bn over 15 months.

    Despite the severity of the near-term shock, the bank projects a significant Gulf rebound, with growth recovering to around 5% in 2027-28 as trade normalises and reconstruction spending begins.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17204153/main.jpg
    Colin Foreman
  • Emaar announces $55bn Dubai project

    12 June 2026

    Register for MEED’s 14-day trial access 

    Mohammed Alabbar, the founder of Emaar Properties, has released a statement saying that the Dubai-based real estate developer is about to announce a $55bn project in Dubai.

    On his social media channels including Instagram and X, he said: “Emaar is preparing to unveil its most ambitious project yet: a development worth AED200bn (around $55bn), commanding an extraordinary vista that brings together, in a single frame, three of the city’s timeless icons – Burj Khalifa, Burj Al-Arab and Palm Jumeirah – complete with the finest essentials of modern living, in the city of Dubai.”

    Emaar has delivered some of the world’s most ambitious real estate projects, including the world’s tallest tower, the 828-metre-tall Burj Khalifa, and the surrounding Downtown Dubai development.

    Commenting on the new project, Alabbar added: “This is no ordinary new development. It is a landmark that takes its place in the legacy of the United Arab Emirates, writing a new chapter in the story of a nation that knows no limits to its ambition.”

    In a statement on the Dubai Financial Market on 11 June, Emaar Properties said it “stands on the threshold of a historic announcement” and revealed more details about the project. It said it will have a total development value of AED200bn, with a gross floor area exceeding 4.5 million square metres.

    It added that it will include a mix of landmark residential towers, signature villas and mansions, Grade-A commercial offices, world-class retail destinations, luxury hospitality, and civic and cultural amenities. Altogether, the development will accommodate a projected population of nearly 150,000 residents. The statement also said the development will be connected to proposed metro lines.

    The exact location of the development was not revealed. Emaar has announced major projects in the past without giving precise locations. In June 2023, it announced the $20bn Oasis project. At the time, the details on the site’s location indicated it was situated in a prime location in Dubai, surrounded by high-end developments and within proximity to four international golf courses. It was later confirmed that the site sits between Damac Properties’ Lagoons development and Dubai Investment Park.   

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17203921/main5547.gif
    Colin Foreman