MENA Region: A Hub for Tech Innovation
The Middle East and North Africa (MENA) region is quickly gaining prominence in the global push for the adoption of cryptocurrency, Web3 technologies, and artificial intelligence. Fuelled by a combination of supportive regulations, significant institutional and enterprise involvement, and a vibrant entrepreneurial environment, MENA is poised to make a substantial impact on the technological landscape.
BeInCrypto interviewed Stephan Apel, CEO of Outlier Ventures, to delve into the characteristics of these tech-driven economies and explore their anticipated innovations.
Web3 Adoption and Market Growth
MENA has emerged as a prominent center for Web3 development, a trend driven by demographic, technological, and cultural factors. “The MENA market has set a standard for adopting next-gen technologies and using them to boost their economic transformation,” Apel stated. “This is especially true for Web3 technologies— the region recognised their potential early on, offering the resources needed for these projects to scale and thrive on both regional and global levels.”
This dynamic environment has led to a surge in Web3 startups, investors, and developers. A 2024 Chainalysis report highlighted MENA as the seventh-largest crypto market worldwide.
From July 2023 to June 2024, the region saw a significant $338.7 billion in online crypto transactions, representing 7.5% of the global total. While the overall cryptocurrency market size may be smaller compared to other regions like North America and Europe, it demonstrates remarkable adoption within its borders.
Notably, Turkey and Morocco stand out as major adopters, ranking among the top 30 countries globally in terms of crypto adoption with Turkey ranking 11th and Morocco ranking 27th. These two nations alone accounted for $137 billion and $12.7 billion in received cryptocurrency value, respectively. Furthermore, the region’s crypto activity is largely driven by institutional and professional players, with 93% of all value transferred involving transactions exceeding $10,000.
Gulf Corporation Council (GCC) members have initiated ambitious technological initiatives, further boosting the region’s prominence in the Web3 space.
MENA’s Strategic Shift Towards AI
The rise of artificial intelligence (AI) has prompted governments and businesses across the Middle East to recognize the global trend toward advanced technologies. Countries like Qatar, Saudi Arabia, and the United Arab Emirates (UAE) are strategically positioning themselves to capitalize on this technological transformation. According to a PricewaterhouseCoopers (PwC) report, AI could contribute up to $15.7 trillion to the global economy by 2030. The consulting firm predicts that the Middle East will contribute 2% of the total global benefits, or $320 billion.
“Unsurprisingly, MENA is now a major global hub for technological and economic activity in emerging sectors like Web3 and AI,” Apel explained. “Abu Dhabi, Dubai, Qatar, and Saudi Arabia are especially notable for the scale of their ambitions and the attractiveness of more prominent international players. The proximity of the network effect of these rapidly developing tech-focused economies should not be underestimated along with the region’s natural location as a global geographic hub.”
The PwC report projects that Saudi Arabia will experience the most significant absolute gains from AI by 2030, with an estimated $135.2 billion added to its economy, equivalent to 12.4% of its GDP. The UAE, however, is expected to see the greatest impact as a percentage of GDP, approaching 14% by 2030. For GCC states Bahrain, Kuwait, Oman, and Qatar, AI is expected to contribute 8.2% of their GDP.
Saudi Arabia’s Vision for AI Development
In 2016, the Saudi Arabian government launched Vision 2030, a comprehensive program designed to promote economic, social, and cultural diversification. Central to this vision is a strategic pivot toward artificial intelligence and data-driven innovation, a crucial element in its economic diversification efforts. Saudi Arabia is making significant strides in AI adoption. The country aims to reduce its reliance on oil revenue by developing advanced technology sectors through targeted investments, infrastructure development, and comprehensive workforce training.
“Fueled by its Vision 2030 initiative, Saudi Arabia has already created a thriving startup ecosystem, dedicated significant investment in emerging technologies, and designed policies to attract global talent and entrepreneurship,” Apel noted.
The Saudi Data and Artificial Intelligence Authority (SDAIA) spearheads Saudi Arabia’s AI initiatives, shaping and implementing the country’s national data and AI strategy. The National Data Bank, designed as a central hub for data access and analysis, is a cornerstone of these efforts, facilitating AI applications across both public and private sectors.
Last November, Saudi Arabia unveiled Project Transcendence, a $100 billion investment initiative aimed at accelerating the integration of AI and advanced technologies.
UAE’s AI Strategy and Investments
The UAE has also been actively pursuing AI adoption. In 2017, the country launched its National Strategy for Artificial Intelligence, with the goal of becoming a global leader in the field by 2031. The UAE AI and Blockchain Council oversees this strategy, which impacts sectors like education, energy, and tourism.
“This financial and regulatory support for AI development will unlock new revenue streams and elevate the region’s international competitiveness,” Apel stated.
The UAE is already seeing the benefits of its AI initiatives. In April, Microsoft announced a $1.5 billion investment in G42, an Abu Dhabi-based technology holding company known for its data centers and the development of Jais, a leading Arabic-language AI model. In September, G42 and Nvidia partnered to create AI-driven solutions for improved weather forecasting, using Nvidia’s Earth-2 platform, which enables AI-augmented climate and weather simulations.
Three months later, Abu Dhabi-based global technological ecosystem Hub71 partnered with Google to boost startup growth in the UAE. This collaboration will bring Google’s “Google for Startups” program to Abu Dhabi, including a dedicated accelerator for Hub71 startups in 2025.
“The Middle East is well-positioned to lead in transformative technologies,” Apel concluded. “MENA’s robust support for entrepreneurship and rapid AI adoption drive groundbreaking change across industries. I see the Middle East becoming a home for startups. There are pre-established policies, resources, and investment opportunities for businesses to scale from the ground up.”
He also highlighted the planned convergence of AI and Web3 technologies in these prominent regions.
Convergence of AI, Web3, and IoT
Integrating the Internet of Things (IoT), blockchain, and AI technologies is gaining momentum among businesses in the Middle East. By combining these technologies, organizations can unlock new avenues for growth, increase efficiency, and provide innovative user experiences.
“These technologies complement one another, enabling automation, transparency, and efficiency at scale,” Apel explained. “Distributed ledger technology, combined with AI, unlocks new possibilities for decentralized systems, while IoT-driven data networks feed advanced analytics and machine learning models.”
In 2018, the Dubai Airport Freezone Authority launched Dubai Blink, a platform that integrates AI, blockchain, and virtual licenses to facilitate global trade. This system enhances supply chain innovation through ‘smart commerce’ by expediting trade with a unified online platform. It also streamlines supplier identification using AI algorithms to accelerate the validation process.
“The region is already ahead of many global trends,” Apel said. “Strategic investments in smart cities, renewable energy infrastructure, and advanced manufacturing highlight the region’s ambition to construct sustainable, technology-driven economies. These initiatives create the perfect ecosystem for scaling and building solutions to regional and global challenges.”
Ultimately, MENA’s proactive approach to technological advancement, coupled with its strategic focus on Web3 and AI, underscores its pivotal role in shaping the digital economy of the future.
