Author: Youssef Lahbiel

INTRODUCTION

Artificial intelligence has emerged as the defining technological and geopolitical contest of the 21st century. For the MENA region, it presents both an extraordinary opportunity and a profound risk of internal fragmentation. The region is not approaching AI as a unified actor. Instead, it is developing along two distinct trajectories, driven by different resources, incentives, and state capacities.

On one side, Gulf Cooperation Council (GCC) states have transformed AI from a policy aspiration into a massive infrastructure and investment program. The UAE launched its national AI strategy as early as 2017, the first Arab state to do so, and has since built one of the world's most ambitious AI ecosystems. Saudi Arabia's sovereign wealth fund has committed to trillion-dollar-scale AI investments under Vision 2030. Qatar has established its own national AI company. These are not aspirational documents: they represent real capital deployment, international partnerships with leading US and Chinese technology companies, and physical infrastructure being built at unprecedented speed.

On the other side, North African states - Egypt, Morocco, Tunisia, Algeria, and Libya - are grappling with the AI revolution under conditions of fiscal austerity, institutional fragility, and geopolitical marginalization. Several are still developing comprehensive national AI strategies and computing infrastructure. Yet these same countries hold something the Gulf demonstrably lacks at scale: large, youthful, increasingly educated populations with growing technology talent pools.

This divergence - capital without sufficient human capital on one side and human capital without sufficient capital on the other - represents one of the defining structural challenges for MENA's AI future. This brief examines its dimensions and proposes concrete policy mechanisms to transform fragmentation into regional complementarity.

THE GULF TRACK: AMBITION AT SCALE

The Infrastructure Race

Gulf States have committed to a capital-intensive, infrastructure-first AI model. By early 2025, GCC nations had invested more than $30 billion in AI projects, with Saudi Arabia and the UAE accounting for the majority. The flagship ambition is Stargate UAE, a 5-gigawatt AI compute complex in Abu Dhabi involving OpenAI, Oracle, SoftBank, and G42, announced during President Trump's 2025 visit. Saudi Arabia's equivalent effort, anchored by the Public Investment Fund's $100 billion 'Project Transcendence' initiative and its AI company HUMAIN, positions the Kingdom as a major AI hub. Qatar has followed with its own AI company, Qai, launched in late 2025.

The Gulf data center market reached $3.48 billion in 2024 and is projected to grow to $9.49 billion by 2030, with regional computing capacity on track to triple from 1 GW in 2025 to 3.3 GW by 2030. Technology spending across MENA is forecast to reach $169 billion in 2026.

Geopolitical Motivations

Gulf AI investments are not purely economic, they are also geopolitical. The three most influential Gulf States are deploying AI investment partly as a mechanism to strengthen US partnerships and secure long-term protection commitments. Access to advanced NVIDIA chips, finally authorized by the US Commerce Department for export to the UAE and Saudi Arabia in November 2025 after a regulatory standoff, was directly tied to these strategic relationships.

This geopolitical positioning has an important implication: Gulf AI infrastructure is being built within the orbit of US and Chinese technology ecosystems rather than as a fully integrated ecosystem. The UAE's G42 and Saudi Arabia's HUMAIN function as national AI champions, but their technological partnerships remain primarily oriented toward Washington and Beijing, with more limited engagement across the MENA region, including Cairo, Tunis, and Rabat.

The Gulf's Hidden Weaknesses

Despite their capital advantage, Gulf AI strategies continue to face several structural challenges. A local talent deficit remains evident, with Saudi Arabia having only 2 AI patent applications compared to 143 in Israel, while the UAE's AI ecosystem produced only 11 newly founded AI companies in 2023, with private AI investment attracting only $406.6 million, a fraction of comparable economies. Research underdevelopment is another major challenge, as Gulf AI capacity is deployment-heavy and research-light, with computing power being imported and breakthroughs not being generated locally.

In addition, Gulf AI workforces remain heavily reliant on imported talent, creating a structural vulnerability in workforce sustainability. Ecosystem gaps also persist despite sovereign wealth fund activity, the GCC has not yet developed a self-sustaining AI startup ecosystem comparable to its infrastructure ambitions.

THE NORTH AFRICAN TRACK: POTENTIAL UNDER CONSTRAINT

The Strategy Gap

The contrast with North Africa is particularly evident at the strategic level. Tunisia, Algeria, and Morocco have been slower to develop formal national AI strategies, although the situation is gradually evolving. Egypt published its National AI Strategy in 2019 and a Charter for Responsible AI in 2023. Morocco launched its 'Digital Morocco 2030' framework in September 2024, with an AI-specific strategy 'Morocco AI 2030' announced in early 2026. Algeria introduced an AI strategy plan in 2019, but implementation has remained limited, and the country is still  absent from major AI readiness indices.

The governance deficit is compounded by institutional capacity gaps. While Gulf States have created dedicated AI ministries, authorities, and sovereign AI companies with multi-billion-dollar mandates, North African equivalents, where they exist, operate with limited budgets, fragmented mandates, and evolving institutional capacities.

The Human Capital Asset

North Africa's AI story is not simply one of constraints and deficits. The region holds demographic advantages and Egypt stands out as North Africa's leading AI hub, driven by national AI strategies, regulatory alignment with European investors, and a large population of technically educated young people. 

Morocco is rapidly gaining recognition, with its Morocco International Center for AI, a 14-position rise in the Government AI Readiness Index in 2025 (reaching 87th globally), and partnerships with France's Mistral AI. The government has earmarked $1.2 billion for its 2024–2026 digital transformation plan.

Tunisia and Algeria possess dense concentrations of STEM graduates and a diaspora of highly skilled technology professionals in Europe and North America, a valuable asset that could be more effectively integrated into national and regional AI strategies.

The Automation Vulnerability

North Africa also faces a distinct AI risk profile that differs from the Gulf: the potential displacement of workers through AI-driven automation. Countries such as Egypt, Jordan, and Morocco have large pools of low - and medium-skilled labor in manufacturing, retail, transport, and administrative services, sectors that are particularly exposed to automation. Without targeted education, reskilling, and social protection frameworks, AI adoption could deepen labor market challenges rather than expand economic opportunities.

THE DIVIDE IN NUMBERS

WHY THE DIVIDE MATTERS: THREE REGIONAL RISKS

Risk 1: Permanent Structural Divergence

If current trajectories continue, the Gulf-North Africa AI gap is likely to widen over time rather than naturally converge. Gulf computing infrastructure, once established, will continue to attract investment, talent, and partnerships. As a result, North Africa risks becoming increasingly reliant on AI products and services developed elsewhere, including within the MENA region. This could reinforce existing center-periphery dynamics and deepen regional disparities in technological development.

Risk 2: Brain Drain Acceleration

The Gulf's AI investment boom is attracting engineering and data science talent from North Africa . While this creates valuable opportunities for professionals and strengthens regional connections, it may also make it more difficult for North African countries to build their own AI ecosystems. Regional cooperation and talent mobility frameworks can help ensure that these flows benefit the entire MENA region rather than deepen existing disparities.

Risk 3: MENA's Collective Marginalization in Global AI Governance

A fragmented MENA risks having a limited influence on the global rules shaping Artificial Intelligence. The emerging AI governance architecture, being shaped at the OECD, G20, UN, and through US and EU regulatory frameworks, requires coordinated regional perspectives that reflect MENA's interests, priorities, and use cases. An Arabic-speaking region of 450 million people, with significant energy reserves and geostrategic importance, has the potential to play a more influential role in global AI governance. However, without greater regional coordination, MENA is likely to participate as a collection of individual actors rather than as a cohesive voice, reducing its ability to shape international standards and advance shared regional interests.

ISRAEL'S AI ECOSYSTEM AND THE MENA AI ARCHITECTURE: AN ANALYTICAL CONSIDERATION

Any credible regional AI framework for MENA must grapple with a reality the current analysis has largely set aside: Israel is home to one of the world's most dynamic AI ecosystems, and it sits at the heart of the region this brief seeks to transform. This is not a political observation; it is an analytical one. Aligning the Gulf AI infrastructure and North African AI capacity, which forms the core of this brief's argument, cannot be fully understood without accounting for a third actor whose AI capabilities dwarf those of most regional peers.

The numbers are instructive. As an example, Saudi Arabia registered 2 AI patent applications in recent years compared to 143 in Israel. That single data point, already cited in this brief, speaks volumes. Israel has built a self-sustaining innovation ecosystem over decades: deep research universities, a mature venture capital culture, a military-to-startup talent pipeline through Unit 8200, and a dense network of multinational R&D centers - from Google and Microsoft to Intel and Amazon - that have chosen Israel as a base for AI research precisely because of its talent density and institutional depth. Israel currently ranks among the top 10 countries globally in AI startup density per capita, and its AI exports are estimated to have exceeded $10 billion annually in recent years.

This matters to the argument advanced in this brief. The structural gaps identified in Gulf AI strategies - research underdevelopment, local talent deficits, limited self-sustaining startup ecosystems - are precisely the areas in which Israel has demonstrated sustained competitive advantage. The Gulf has capital and infrastructure; Israel has research culture and innovation depth. North Africa has demographic scale and growing human capital; Israel has an established model for converting university talent and public sector R&D investment into globally competitive companies. These are not randomly overlapping profiles. They suggest genuine complementarity.

The Abraham Accords, signed in 2020, have already unlocked formal cooperation channels between Israel and the UAE, Morocco, Bahrain, and Jordan - representing four of the most strategically significant actors in this brief's analytical landscape. AI cooperation between Israel and the UAE in particular has progressed rapidly since normalization, with joint ventures, investment flows, and technology partnerships emerging in areas including cybersecurity, healthcare AI, and fintech.

POLICY RECOMMENDATIONS

Recommendation 1: A MENA AI Complementarity Compact

Gulf and North African heads of state should negotiate a formal MENA AI Complementarity Agreement - a binding political agreement that explicitly links Gulf AI capital with North African human capital. The Compact would establish annual targets for Gulf AI companies to source research, development, and technical talent from North African universities and tech ecosystems. It could also support joint AI pilot projects in sectors of regional strategic importance, including Arabic NLP, climate modeling, agricultural AI, and healthcare diagnostics, accompanied by a shared monitoring and accountability mechanism to track implementation. This is not charity; it is strategic self-interest. Gulf AI companies need talent, and  North Africa has it. A Complementarity Compact would transform an implicit challenge into a structured regional partnership.

Recommendation 2: A Regional AI Talent Mobility Framework

MENA should establish a dedicated AI Talent Mobility Framework, a streamlined visa, residency, and professional recognition regime specifically for AI professionals moving within the region. The framework could introduce a MENA AI Professional Passport, a portable credential recognized by participating states, reducing bureaucratic barriers to regional talent mobility. It could also include home-country retention incentives, allowing AI professionals working in Gulf States to maintain formal affiliations with research institutions in their countries of origin, strengthening long-term collaboration and knowledge exchange. In addition, Gulf AI companies benefiting from North African talent could support capacity-building programs and joint research initiatives across the region.

Recommendation 3: A MENA Sovereign AI Governance Council

Heads of state should establish a MENA Sovereign AI Governance Council, a political-level body meeting annually to set shared standards, interoperability frameworks, and data governance protocols across the region. The Council would develop a MENA AI Ethics Charter reflecting shared regional values while complementing existing US and EU AI governance models. It would also coordinate MENA's collective engagement in global AI governance forums, including the OECD AI Policy Observatory, the UN AI Advisory Body, and the G20 Digital Economy Track. In addition, it would  establish interoperability standards for AI systems deployed across MENA borders, supporting cross-border services in health, finance, and public administration.

Recommendation 4: A MENA AI Investment Corridor

Gulf sovereign wealth funds, which collectively hold over $4 trillion in assets, currently invest less than 3% within the MENA region. Heads of state should promote a MENA AI Investment Corridor that encourages a greater share of Gulf AI investment to support North African AI infrastructure, including data centers, computing infrastructure, AI-ready university facilities, and startup ecosystems. Investments should be structured as development partnerships, rather than acquisitions, preserving North African technological sovereignty while fostering long-term collaboration. Co-investment mechanisms involving both Gulf sovereign wealth funds and North African public institutions would further strengthen ownership and accountability.

Recommendation 5: A Pan-MENA Arabic AI Research Consortium

The most consequential foundational investment MENA can make is in Arabic-language AI. Large language models trained predominantly on English and Mandarin data continue to underserve Arabic speakers, a community of more than 450 million people representing a major global market and a rich linguistic and cultural heritage. Heads of state should launch a Pan-MENA Arabic AI Research Consortium to develop shared Arabic-language AI datasets, benchmarks, and evaluation frameworks, pooling  resources that no single country can build alone. The Consortium could also support the development of MENA's first regional Arabic foundation model and establish joint research centers across Gulf and North African institutions, creating lasting networks of collaboration, innovation, and trust.

Recommendation 6: AI under Abraham Accords

Governments of Abraham Accords signatory states - the UAE, Morocco, Bahrain, and Jordan - should establish an AI framework with Israel, leveraging existing normalization frameworks to unlock structured AI cooperation. The Initiative should prioritize joint R&D programs in STEM, agricultural AI, and climate modeling; facilitate talent exchange programs between Israeli research universities and North African STEM institutions; and create co-investment vehicles between sovereign wealth funds and Israeli AI venture capital. Participation should remain open to other MENA states as political conditions evolve.