Venture capitalists gathered at the Sharjah Entrepreneurship Festival (SEF2026) left little doubt that the Gulf is entering a fresh investment cycle centred on artificial intelligence and adjacent technologies. Panelists from regional and international funds painted a picture of abundant capital, purposeful state policy and a growing talent pipeline that together are transforming the investment landscape across the Gulf Cooperation Council.
Speakers singled out structural advantages that make the region attractive to tech investors. Low energy costs, progressive regulation on data and privacy, and university programmes focused on AI were cited as durable competitive edges. Global investors are beginning to take note: venture firms reported limited partners from outside the region are committing capital, and an emerging cohort of locally domiciled funds is mobilising to back early-stage companies.
Concrete data underlines the momentum. Injaz Capital’s chief investment officer reported that Saudi Arabia recorded some 250 “largest-scale” deals in 2025 and led the region in aggregate transaction value, while Saudi-backed funds have recently launched vehicles targeting early-stage biotechnology. Those moves align neatly with the kingdom’s Vision 2030 ambitions to diversify away from hydrocarbons and build high-value industries.
Fund managers at the festival also stressed the international dimension. One founder noted that banks in Europe — including Greece’s major lenders — are showing up as limited partners, signalling a willingness among external institutions to take exposure to Gulf tech opportunities. Such cross-border capital flows can deepen local ecosystems but also link the region’s fortunes more tightly to global market cycles.
The implications are manifold. For the GCC, an AI-led investment surge can accelerate industrial diversification, create high-skilled employment, and foster new domestic champions in software, cloud services, and biotech. For global tech hubs, it represents both competition for talent and an opportunity for partnerships; Gulf sovereign and private capital could become a steady source of funding for startups worldwide.
Risks remain. Rapid capital inflows can inflate valuations and encourage a rush into fashionable sectors without the supporting talent or regulatory clarity. Data governance, dual-use technologies and geopolitical sensitivities mean that the Gulf’s tech ambitions will be scrutinised by partners and rivals alike. The concentration of capital in a few states, particularly Saudi Arabia and the UAE, could also produce uneven development across the wider Middle East.
The Sharjah festival itself — organised by the Shuraa entrepreneurship centre and held at the Sharjah Research, Technology and Innovation Complex on 31 January–1 February 2026 — exemplifies the region’s desire to build local ecosystems where founders can prove business models and prepare for institutional investment. For founders, fund managers and policymakers, the immediate priorities are clear: scale local talent pipelines, build investor-ready governance and ensure regulatory frameworks keep pace with commercial experimentation.
Over the next 12–24 months the region will be worth watching for the volume and nature of deals, the formation of home-grown specialised funds (notably in biotech and AI infrastructure), and the patterns of international partnerships. If policy ambition is matched by execution — in education, procurement and governance — the Gulf could move from being a cash-rich backer of foreign innovation to a breeding ground for companies that shape global AI markets.