The UAE Advances as a Global AI Powerhouse

Through a combination of strategic investment, regulatory foresight, and partnerships with top technology firms, the country is positioning itself as a global AI powerhouse. With AI expected to be a major driver of economic growth, the UAE is well on its way to becoming a world leader in artificial intelligence and digital transformation.

Strategic Investments and Innovation Position the UAE at the Forefront of Artificial Intelligence

The UAE is solidifying its role as a global leader in Artificial Intelligence through strategic investments, supportive regulations, and a commitment to digital transformation. AI is projected to contribute $100 billion to the country’s GDP by 2030, reinforcing its status as a premier destination for AI talent and startups.

AI Driving Economic Growth and Innovation

The UAE continues to establish itself as a major player in the AI sector, with a clear vision that extends beyond economic benefits. According to a PwC report, AI is expected to contribute 13.6% of the UAE’s GDP by 2030, placing the country among the top three globally, behind only the US and China. The nation’s focus on AI is not just about technology but about fostering a long-term economic and societal transformation.

The country’s regulatory landscape plays a critical role in its success. Analysts highlight how the UAE’s frameworks support innovations in financial technology and digital payments while maintaining robust cybersecurity measures. These regulations encourage investment and protect businesses and individuals, making the UAE a favorable environment for AI-driven enterprises.

Government Leadership in AI Implementation

Abu Dhabi is spearheading government adoption of AI, aiming to become the first fully AI-powered government. This initiative includes the full integration of sovereign cloud computing and a complete digital transformation of government operations. Such efforts set a benchmark for other nations looking to modernize their public sectors with AI.

The UAE’s early adoption of AI strategies—starting with its 2017 National AI Strategy—has laid the foundation for its rapid growth. With a target of becoming a global AI hub by 2031, the strategy prioritizes advancements in education, healthcare, transportation, and energy. This focus ensures that AI development aligns with national priorities and serves as a catalyst for broader technological progress.

Collaboration and Talent Development

The UAE’s success in AI is further strengthened by strategic partnerships with industry leaders such as NVIDIA, Google, and Oracle. These collaborations enable the country to stay at the forefront of AI innovation while attracting top talent from around the world. The UAE has seen a 40% increase in AI professionals since 2022, further solidifying its position as a prime destination for experts in the field.

FTA Publishes New Guide on Interest Deduction Limitation Rules under UAE Corporate Tax Law

The guide reflects the UAE’s intention to bring its corporate tax regime in line with international best practices, particularly the OECD’s BEPS (Base Erosion and Profit Shifting) framework, specifically Action 4, which addresses excessive interest deductions. Companies are well advised to incorporate these rules into their tax planning strategies to avoid adverse consequences and to benefit from the flexibility that the legislation offers when applied correctly.

Legal Analysis of the UAE’s New End-of-Service Gratuity Savings Scheme

The UAE’s new end-of-service savings model represents a forward-thinking reform that offers substantial benefits for both employees and employers. The ability to transfer gratuity funds into professionally managed investment schemes provides greater transparency and long-term financial security. Companies interested in participating should proactively adjust their internal processes to take full advantage of this innovative model.

The New UAE Competition Law

The reform of competition law in the UAE marks a significant step towards a more modern and transparent regulatory framework. The introduction of clearly defined merger control thresholds, the elimination of broad sectoral exemptions, and the substantial tightening of penalties reflect a more regulated competitive environment. The law came into force on December 29, 2023, while the new merger control thresholds have been in effect since March 31, 2025. Companies must therefore ensure full compliance with these new provisions as of that date.

Law No. 2 of 2025: Comprehensive reform of the DIFC Courts Law

Law No. (2) of 2025 marks a significant milestone in the development of the DIFC Courts, with a strong focus on mediation, judicial efficiency und a human-centered approach to dispute resolution. By clearly delineating jurisdictional boundaries, introducing mechanisms for amicable settlements, and enhancing procedural flexibility, the law reinforces the DIFC’s standing as a premier international financial center with a modern and effective judicial framework.

Author

Omar Sami

Managing Partner
Rechtsanwalt | Lawyer