UAE Firms Increase AI Investments Amid Rising Spending

Businesses in the United Arab Emirates are significantly enhancing their adoption of artificial intelligence (AI) technologies, driven by a desire to reduce costs, boost productivity, and improve resilience. Recent data indicates a remarkable 521 percent increase in AI-related spending over the past 13 months, reflecting a transition from experimental use to operational implementation, particularly among smaller enterprises aiming for rapid productivity improvements in an increasingly uncertain economic landscape. The insights are derived from a report published by Pemo, a spend management firm based in Dubai, which analyzed aggregated and anonymized transaction data from over 6,000 businesses, amounting to more than AED 1.4 billion in annual expenditures. The report reveals that 12 percent of the sampled UAE businesses are currently utilizing AI tools, with a notable acceleration in adoption observed in late 2025, continuing into 2026. The last quarter of 2025 saw a threefold increase in first-time AI adopters compared to any quarter in 2024, indicating a shift from experimentation to more stable investment strategies. This trend is significant as it provides a clearer understanding of AI spending patterns in the UAE, a region where official policies have long advocated for digital transformation, yet detailed data on private-sector adoption has been scarce. The UAE's Digital Economy Strategy aims to elevate the sector's contribution to the national GDP from 9.7 percent in 2022 to 19.4 percent within the next decade. Concurrently, the UAE Strategy for Artificial Intelligence 2031 positions AI as a cornerstone for enhancing competitiveness, government efficiency, and future economic growth. Notably, the report highlights the substantial role of small and medium-sized enterprises (SMEs), which accounted for 59 percent of total AI expenditures, despite larger companies generally spending more on average. Mid-sized firms emerged as frequent users of AI transactions, suggesting that these businesses are agile enough to implement AI tools swiftly while being sufficiently large to distribute them across various teams. Ayham Gorani, co-founder and CEO of Pemo, noted that companies are becoming more discerning in identifying areas where AI can deliver immediate benefits, focusing on enhancing efficiency, minimizing operational friction, and enabling teams to work more swiftly without complicating processes. He emphasized that organizations are increasingly striving to achieve more with fewer resources, and the visible returns from AI investments are facilitating broader adoption beyond isolated applications. However, the report also indicates that many companies remain in the early stages of AI adoption. Nearly two-thirds of businesses utilizing AI rely on a single tool, with only 37 percent employing two or more. This suggests that while the surge in spending is notable, it does not yet signify a comprehensive transformation across the corporate sector. Instead, many firms appear to be initially exploring narrow applications, such as workflow automation and content generation, before committing to more extensive organizational changes. This observation aligns with the ongoing global discourse surrounding AI adoption. The International Monetary Fund (IMF) noted in February that AI has the potential to enhance global productivity by up to 0.8 percentage points annually, contingent upon the implementation of appropriate policies. The IMF's 2025 consultation on the UAE highlighted the government's focus on AI as a catalyst for productivity and diversification in non-hydrocarbon sectors. It is important to recognize the limitations of the Pemo dataset. As it is based on confirmed card and bill-pay transactions, it captures only the visible aspects of corporate AI spending, potentially overlooking internally developed systems, bundled software contracts, or AI functionalities integrated into broader technology platforms. Consequently, the figures should be interpreted as indicative of commercial purchasing behavior rather than a comprehensive overview of all AI deployments within the country.

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