Oil-Rich Gulf States Look to Robotics and AI for Next Phase of Growth

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Typically, Japan, South Korea, Silicon Valley, and China are locations that one thinks of when looking for robotics and AI innovation. However, the Middle East is expected to soon join this tech elite where oil-rich states like the United Arab Emirates (UAE) and Saudi Arabia are beginning to chart their future as the world moves beyond fossil fuels in the coming decades.

UAE Striving to Become a Global Hub of Innovation

The UAE has one of the most visionary AI strategies in the world that cuts across multiple sectors from transport and health to environment and space, but focuses on driving 100X efficiencies in government services and improving the competitiveness of the UAE on the global stage. The UAE is one of the first countries in the world to have a minister of state for AI, the impressive 27-year-old Omar bin Sultan Al Olama. Having a young visionary leader drive its AI strategy is part of the uniqueness that Dubai brings, and compared to the various other nations that are churning out AI policies these days, the UAE has decided to be practical and focus on its strengths, rather than compete on AI as a whole. One result of this practical approach is that it plans to use AI for building future cities, with Dubai and Abu Dhabi arguably already on the cutting edge in terms of technology and infrastructure.

The plan is to go one step further with the use of autonomous cars, hyperloop transportation systems, drone deliveries, robot police, and AI and robotic-driven healthcare, all of which is pointed toward improving the lives of UAE citizens and making it a global hub for innovation, attracting the best talent from all over the world. The UAE already holds the leadership position in the Middle East and North Africa (MENA) region for innovation, with more than 300 digital startups and 32% of all MENA investors. Apart from AI and robotics, the UAE is also investing in blockchain and space technologies. By 2020, Dubai hopes to execute all government-related transactions on the blockchain and has plans for sending the first homegrown satellite to Mars by 2020 with the idea of setting up a full human settlement on Mars by 2117.

All of this is part of the Dubai Future Foundation, which has set a goal for Dubai to be 10 years ahead of all other world cities, with the UAE becoming the world’s largest laboratory for new models of government and a vehicle for radical change, rather than a barrier. Dubai has the advantage of being a city-state within a nation-state, where the city-state is the dominant entity, which gives it more flexibility and avoids the usual challenges that large nation-states face in terms of driving policies and gaining wide consensus. Despite being an authoritarian government, the future of Dubai and the UAE looks bright with its leader, Sheik Mohammed bin Rashid al-Maktoum, charting a bold path for the country.

Saudi Arabia Moving beyond Oil and Embracing Technology

In a similar vein, UAE’s neighbor and ally, Saudi Arabia, also has a young leader, Crown Prince Mohammed bin Salman, who hopes to build a future for his country driven by robotics and AI. Saudi Arabia has been in the news recently for being the first country to grant citizenship to humanoid robot Sophia; however, the AI and robotics strategy goes beyond meaty headlines. Crown Prince Salman has a bigger challenge compared to the UAE, with 50% of the Saudi economy dependent on oil today, as compared to around 30% for the UAE. Unlike the UAE, which has a faster growing economy and a rapidly increasing “non-oil” proportion of its gross domestic product (GDP), Saudi Arabia has been slower at moving beyond oil and, in fairness, is 2.5X bigger in terms of its economy and 5X bigger in population than the UAE.

In early 2016, a National Transformation Plan (NTP) was launched as part of the Saudi Vision 2030. The idea was to move the Saudi economy swiftly away from oil, with more than 500 initiatives and 300 targets. However, by the end of 2017, most of this was reset, as the plan was deemed “overly ambitious.” As a part of the revised NTP 2.0 at the end of 2017, which provided more focused initiatives, a new $500 billion smart city project called NEOM was announced. NEOM is defined as one of the most advanced cities in the world, spanning 10,200 square miles built on common land between Saudi Arabia, Jordan, and Egypt. NEOM is expected to use the latest AI and robotics technologies, powered 100% by renewable energy, with robots doing the majority of manual tasks like cleaning and security possibly outnumbering humans. NEOM is funded by the $2 trillion Saudi Arabian Public Investment Fund, which is the world’s largest wealth fund. One of the biggest stakes of the Public Investment Fund is in Saudi Aramco, which is expected to float one of the largest initial public offerings (IPOs) with a valuation of $2 trillion. Saudi Aramco is also spearheading the use of robots with 11,000 robots expected to carry out technical and industrial jobs across its company.

NEOM is how Saudi Arabia is showcasing to the world that it is moving beyond the image of a conservative Muslim country, toward a more moderate Islam that embraces technology and the future. The Public Investment Fund has also made investments in SoftBank’s $100 billion Vision Fund, Virgin Galactic, and the Blackstone Group. The 2018 edition of the Public Investment Fund Summit is taking place in Riyadh in October, where more investment partners and smart city projects are likely to be announced, possibly involving robotics and AI. The recent visit of the Saudi Crown Prince to the United States, with a special visit to Silicon Valley was possibly aimed at attracting Silicon Valley talent and investment in the country.

Creating an Environment to Meet Robotics and AI Demand

Both Saudi Arabia and the UAE are leveraging their oil wealth to make the pivot toward a future that will be led by AI and robotics, and both are destined to send their citizens to outer space, nearby planets, and beyond. There is a concerted effort within these countries, led by young visionaries, to embrace technology and innovation. Rather than build and bolster AI and robotics expertise internally as China is doing, these Middle Eastern Gulf states realize that the one way they could benefit from the AI and robotics revolution is by attracting foreign investment, creating a startup-friendly environment, and bringing in entrepreneurs from other parts of the world.

There are many challenges to overcome, possibly more so for Saudi Arabia than the UAE, with Saudi Arabia needing to make a bigger cultural shift and having a larger dependence on oil; however, one can no longer ignore the impact of the Middle East on AI and robotics. The focus on boosting the infrastructure of existing cities like Dubai and Abu Dhabi, while creating brand new cities like NEOM, will be a key driver for robot and AI demand in the future, but this is also likely to spur new and innovative AI and robotics companies in the region.

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