Saudi, UAE lead AI startup funding in MENA

Saudi Arabia and the UAE have emerged as top destinations for AI startup funding across the Middle East and North Africa (MENA), as both nations look to scale their investments in frontier technologies. 

Enterprises across the UAE and Saudi Arabia raised $519 million and $235 million, respectively, making up 60% and 27% of the MENA’s AI funding last year, according to data platform Magnitt. 

The reported attributed strong financial services sectors as a key driver, with most VC investors hosting offices in either Riyadh or Dubai. 

Saudi Arabia and the UAE have launched colossuses to drive their national AI ambitions – G42 backed by Abu Dhabi sovereign wealth fund Mubadala Investment Company and Humain, a subsidiary of Saudi sovereign wealth fund, Public Investment Fund.

The US recently authorised the export of advanced AI chips to G42 and Humain, slated to receive American semiconductors, equivalent of up to 35,000 Nvidia Blackwell chips.

The International Monetary Fund said that the GCC is well-positioned to leverage digitalization, with most countries close to or on par with advanced economies, especially in terms of digital infrastructure and affordability. 

“Similar to digitalization, the GCC’s AI preparedness exceeds that of an average EM (emerging market), supported by rapid advances in AI investments (including by SWFs), R&D (e.g., initiatives with universities and research centers, and investments in GenAI foundational models), and talent (including the attraction of AI skills from abroad),” the fund said in its GCC note published on December 6. 

AI captures sizeable slice

AI startups in MENA raised $858 million in 2025, making up 22% of the region’s total funding and 29% of its deal volume. 

AI-native startups, with their appetite for compute and model development, received 69% of total AI capital, while AI-enabled startups raised $267 million.

AI-native are startups whose core product or service is built on AI, while AI-enabled startups deploy the technology within their workflows and processes

Enterprise software stood as a top performer, drawing 30% of the region’s AI funding with 59 deals, signalling at the growing adoption of AI solutions by corporates.