UAE firms increase AI spending, but execution gaps continue: study

Artificial Intelligence (AI) spending by organisations in the UAE has more than doubled over the past year, but a new study suggests that many businesses are still struggling to translate investment into enterprise-wide execution.

UAE organisations increased their AI spending by 105% year-on-year, yet recorded an AI maturity score of 48 out of 100, according to the UAE findings of ServiceNow’s Enterprise AI Maturity Index. While the score represents a 13-point improvement from the previous year, the findings point to persistent gaps in technology infrastructure, data readiness, workflows and workforce capabilities.

The study found that the challenge is not a lack of investment. UAE organisations expect AI to account for almost one-fifth of their total IT budgets by 2027. However, many businesses are still attempting to deploy AI across fragmented technology environments, disconnected data and siloed workflows.

Organisations have made progress in areas including AI vision, strategy and leadership, but lower maturity in AI-enabled workflows and talent development is limiting their ability to scale AI across the enterprise.

The findings also highlight a cautious approach to agentic AI, despite its growing prominence in the region. More than half, or 57%, of UAE organisations have implemented agentic AI, but only 7% have used it to create autonomous workflows.

This indicates that AI is still primarily being used to help employees improve productivity rather than fundamentally changing how businesses operate. Organisations are continuing to build the governance, trust and operational foundations required to deploy autonomous AI at scale.

“The UAE remains one of the world’s most ambitious AI markets. The government’s long-term strategy and regulatory leadership have given organisations a genuine head start,” said Saif Mashat, VP – Middle East & Africa at ServiceNow.

He said organisations that are moving ahead are shifting from AI pilots towards AI orchestration by connecting legacy systems, data, governance and AI agents.

Legacy technology remains a major barrier to this transition. Only 14% of UAE organisations have replaced legacy systems with integrated platforms, leaving many businesses with fragmented workflows and technology environments that make it harder to scale AI.

Data readiness is another significant challenge. More than three-quarters, or 77%, of UAE executives identified inadequate data accuracy, access and management as a major barrier to AI adoption.

The study found that organisations with higher AI maturity are more likely to have a shared AI strategy, integrated data infrastructure, autonomous AI workflows, continuous workforce upskilling and stronger trust and transparency measures around AI governance.

These organisations reported an average AI return on investment of 160%, which is projected to rise to 194% within two years. They were also found to be 5.6 times more productive, 2.7 times more successful at scaling AI and 2.6 times more effective at managing risk.

However, governance remains an area where UAE organisations have room to strengthen their capabilities. Only 16% have implemented AI testing, auditing and risk management processes, highlighting a gap in the controls needed to support responsible AI deployment at scale.

“The organisations pulling ahead are no longer distinguished by how much they spend on AI, but by how effectively they operationalise it,” Mashat said.

The findings suggest that the next phase of AI adoption in the UAE will depend less on increasing investment alone and more on organisations' ability to integrate data and systems, redesign workflows, develop workforce capabilities and establish effective AI governance.

As UAE organisations move from experimentation towards broader AI deployment, the study indicates that execution capability will increasingly determine whether rising AI investments translate into measurable business outcomes.