The Gulf Cooperation Council (GCC) is poised to lead a digital transformation, redefining the region's economy. But realizing that potential will take some work. Although there’s a commitment to advanced artificial intelligence (AI) and openness to new technologies, significant gaps remain. For instance, most C-Suite executives we surveyed recognize the importance of transformation to stay competitive, but only 32% have fully implemented AI solutions. This disparity highlights a pressing need for GCC companies to accelerate their AI adoption to drive strategic growth.

We identified these seven trends as being critical for shaping the GCC’s future:

1. AI agents driving the next wave of GCC innovation

Proactive AI agents that anticipate needs and streamline operations will be game changers. From automating customer service to optimizing supply chains, these intelligent systems are set to revolutionize productivity across GCC industries.

2. AI momentum defines the future of GCC business growth

More than 70% of C-Suite executives believe significant transformation is necessary to remain competitive. Yet only 32% have fully implemented AI solutions, according to the global AIQ Strategic Survey by Quotient — AI by Oliver Wyman. Accelerating AI adoption will help close this gap and drive strategic growth.

3. Sovereign AI becomes the backbone of GCC innovation

Sovereign AI — a nation’s ability to produce AI using its own infrastructure, data, workforce, and business networks — is becoming increasingly vital. By deploying models locally, organizations can enhance privacy, safeguard innovation from geopolitical fluctuations, and reduce latency — key for smart city initiatives. A prime example is Abu Dhabi's Digital Strategy 2025-2027, which aims for 100% sovereign cloud adoption and the digitization of all government processes.

4. GCC powers AI growth with smart energy and innovation

The GCC is embracing a dual strategy to fuel AI growth. It leverages traditional energy resources as a foundation while investing in smart infrastructure and prioritizing renewable sources like solar and wind energy. This multi-pronged approach could position the GCC as a global hub for AI workloads, driving innovation and diversification.

5. AI investment surge positions GCC as a tech powerhouse

GCC Sovereign Wealth Funds — state-owned investment funds — are poised to reshape the global AI landscape. Abu Dhabi’s Digital Strategy 2025-2027 allocates Dhs13 billion ($3.53 billion) to develop local infrastructure and capabilities. Such investments will foster strategic partnerships and knowledge transfer, making the GCC an attractive hub for AI businesses and startups.

6. Bespoke AI creates smarter, faster digital experiences

By analyzing and integrating personal data — cloud storage, emails, text messages, and phone calls — AI has the potential to develop targeted insights and recommendations. This could lead to a more efficient and streamlined approach to everyday tasks.

7. Physical AI sparks autonomous revolution in urban mobility

From autonomous vehicles and drones to Industry 4.0, the integration of AI with the industrial Internet of Things and advanced robotics is revolutionizing logistics and production processes. Dubai aims 25% of transport to be autonomous by 2030, paving the way for more efficient urban mobility.

Addressing these seven imperative trends will help the GCC to improve its competitiveness and set the foundation for a sustainable and advanced tech future. Overall, the magnitude of innovation and development still remains untapped — and being proactive and thoughtful amid this transformation is critical for all stakeholders.