How can the UAE transform from a traditional oil giant to a strong competitor in the global digital economy? The answer is artificial intelligence and Web3. With a favorable policy environment and geographical advantages, the UAE is quietly seizing strategic opportunities at a time when relations between the world's largest economies are tense.
Although they are in different fields, artificial intelligence and blockchain are increasingly converging to jointly promote a more autonomous, transparent, and data-driven system to reshape all industries. This trend will help the UAE to leverage the complementary advantages of the two and rewrite the technological and economic landscape in the current uncertain global situation.
To understand how the UAE plays this “all-mighty card”, we must look at it from the different perspectives of two iconic cities, Dubai and Abu Dhabi, which share the mission of leading the country towards Web3 and AI heights.
Dubai: Agile, Commercial and a Global Hub
Dubai's strategy emphasizes institutional agility, business orientation, and becoming a global hub for fintech, AI, and Web3. It leverages its business-friendly environment and world-class infrastructure to attract innovation, talent, and capital by building a supportive regulatory framework.
Agile regulatory system: Dubai Virtual Asset Regulatory Authority (VARA) is the world's first independent regulatory agency established specifically for virtual assets, known for its clear and flexible rules. Through an "activity-based" regulatory framework, the agency provides specific guidance for virtual asset exchanges, custody and consulting, and encourages industry interaction to create a predictable and friendly business environment, attracting a large amount of capital and talent.
Web3 Launchpad and Innovation Cluster: With its geographical advantages and policy support, Dubai is rapidly becoming an incubator for cutting-edge technologies. Currently, more than 800 AI companies have settled here, of which 66% use Dubai as their global headquarters. By 2024, Dubai will have more than 700 blockchain companies. The blockchain market in the Middle East and North Africa (MENA) region is expected to grow to US$40 billion in 2027. Dubai's AI and Web3 Innovation Park also issues official licenses for activities such as AI research and distributed ledgers.
D33 Economic Agenda: Dubai’s D33 10-year economic blueprint aims to double the size of its economy to AED 32 trillion (US$ 8.7 trillion) by 2033 and rank among the world’s top three cities. The plan covers 100 key projects in a variety of fields including technology (AI, Web3), finance (FinTech, Islamic finance), logistics, tourism and advanced manufacturing, and strives to become one of the world’s top four financial centers.
Abu Dhabi: Institutional drive, scientific research orientation and strategic infrastructure
Abu Dhabi adopts a more institutionalized "top-down" model, emphasizing basic research, advanced technology development and large-scale infrastructure construction, with the goal of gaining a foothold in the global AI and digital asset arena.
Government-driven digitalization and AI-native transformation: Abu Dhabi’s “Government Digital Strategy 2025-2027” aims to become the world’s first fully AI-native government system by 2027. The plan will invest approximately AED 13 billion (approximately US$ 3.5 billion) over three years to achieve full coverage of the sovereign cloud, 100% digitization and automation of government processes, and deployment of more than 200 AI innovative applications.
Research and talent development: The Mohammed bin Zayed University of Artificial Intelligence (MBZUAI), which I visited this spring, is the world's first higher education institution dedicated to AI. In addition, the Abu Dhabi Advanced Technology Research Council (ATRC) and the Technology Innovation Institute (TII) are developing quantum computing and AI models (such as Falcon). Its "AI for All" program is committed to promoting the popularization of AI for all people and ensuring that the benefits of technology can benefit ordinary people rather than being limited to the elite.
Strategic infrastructure and large-scale investment: Abu Dhabi has jointly built the world's largest AI campus outside the United States, and has invested in AI infrastructure around the world through the MGX Fund, such as the $30 billion AI investment fund in partnership with Microsoft and Blackstone, and the $1.5 billion investment in local leader G42. MGX is also one of the first financial supporters of OpenAI's $500 billion US AI project.
Institutional digital asset infrastructure: Abu Dhabi is methodically building a digital asset ecosystem for institutional investors, providing regulatory clarity, secure custody solutions, and deep integration with the traditional financial system. This system is driven and implemented by the Abu Dhabi Global Market (ADGM) through forward-looking regulatory design, aiming to provide confidence and security for large-scale institutional funds to enter Web3.
Conclusion: Strategic synergy of one body and two wings
Through Dubai's open ecosystem and Abu Dhabi's institutionalized deployment, the UAE has embarked on a development path that is both flexible and robust, and is fully participating in the global competition in digital economy and technology.
However, we still need to ask several important questions about its future development:
Can the UAE remain competitive as the current high subsidies are phased out?
Can the local education system continue to cultivate truly innovative talents? Is it still too dependent on foreign talents?
These are the questions that the UAE must face and answer on its path toward long-term leadership in Web3 and AI.
Author: Dr. Max Li, founder of OORT and professor at Columbia University
Originally published in Forbes: https://www.forbes.com/sites/digital-assets/2025/05/27/from-oil-to-technology-the-uaes-rise-to-web3-and-ai-leadership/
