IDC predicts that AI will have a cumulative global economic impact of $19.9 trillion by 2030, driving 3.5% of global GDP growth. Governments will play a strategic dual role – both shaping policies for secure, impactful, and responsible adoption of AI across industries, and acting as major buyers of AI to transform public programs and services, enhancing operational efficiency and achieving mission outcomes.

The Gulf countries have ambitious aspirations to lead the global AI economy. Empowering public service transformation through AI has become both an economic competitiveness and national security imperative for the region. In fact, IDC predicts that by 2029, 40% of national governments, led by EU and GCC countries, will use agentic AI to digitize public services by life events, reducing the cost to operate digital channel infrastructure and platforms by 25%.

For instance, the Abu-Dhabi Government Digital Strategy 2025-2027 aims to “…position the emirate as a global leader in AI-driven government and will deploy AED13 billion through 2025-2027 to foster innovation and technology adoption in the emirate…”. Likewise, the Kingdom of Saudi Arabia wants to position itself as “…one of the leading countries in the field of AI at the global level”, and through its AI investment vehicle, Humain, plans to build up to six gigawatts of data center capacity nationwide by 2034.

The early applications of AI agents in government focused primarily on back-office functions such as HR, procurement, and IT, assisting with automating code documentation, software development, testing, engineering, and compliance with security regulations. However, AI agents are rapidly enabling governments to automate more complex, multi-step processes that cannot easily be codified through rules. These include mission-critical areas such as border control, public health, social benefits, and grants management.

Across these mission areas, AI solutions, like TAMM AI Assistant can drive more responsive, personalized, and convenient services that enhance citizen satisfaction and trust by addressing the challenges of bureaucratic, siloed delivery. They also have the potential to improve urban quality of life, as seen in initiatives, such as the KAFD smart traffic management project, or Dubai Police’s advanced computer vision systems for traffic safety.

Governments that are leading the AI race are focusing their strategies on key aspects namely – organizational change, responsible use, data readiness, and digital sovereignty.

Let’s explore how each of these elements will play a critical role in 2026.

Organizational Change

Implementing AI requires upskilling the entire government workforce to explore its potential and understand how their roles will evolve. Specialized technical expertise will be critical, not only in AI model development but also in agent and model orchestration, AI stack security, and cost control (e.g., managing per-token charges from third-party providers or optimizing GPU cluster deployment in private cloud environments).

Responsible Use of AI

Robust output validation, oversight, and monitoring are essential, particularly in use cases involving sensitive national security missions or government programs that impact vulnerable populations. Clear accountability and ethical frameworks will strengthen public trust.

Data Readiness

While accuracy is improving with newer large language models, fine-tuning and grounding models for specific government programs remain paramount. In some mission areas, small language models (SLMs) may also be more appropriate.

IDC’s 2025 Government Insights Survey reveals that 45% of governments plan to fine-tune GenAI models, and 35% plan to ground them using retrieval-augmented generation (RAG) frameworks. High-quality, secure, and accessible data is crucial for training, grounding, and operating AI agents. This is especially vital for autonomous agents, whose performance depends on memory and self-learning from prior interactions.

AI Sovereignty

Governments increasingly seek flexibility in AI deployment environments. According to IDC’s 2025 Government Insights Survey, only 32% of governments prefer the public cloud for AI. The majority favor private, hybrid, or sovereign setups.

IDC predicts that by 2026, 55% of governments will adopt hybrid sovereign cloud stacks – blending hyperscaler scale with national control to ensure compliance, security, and strategic autonomy of AI.

Sovereign control of the end-to-end AI ecosystem – from infrastructure to data, models, operations, and talent – is a top priority in the Gulf. For example, the Abu-Dhabi Government Digital Strategy 2025-2027, which aims to “… to establish a robust digital infrastructure, creating a flexible and scalable foundation to achieve 100% adoption of sovereign cloud computing for government operations and digitizing and automating 100% of processes.”

The Quantum Future

Beyond AI, quantum computing is emerging as a transformative technology for government, offering the potential to solve complex challenges in national security, scientific discovery, and critical infrastructure management. The integration of quantum and classical compute technologies will empower governments to operate more securely, efficiently, and strategically, laying the foundation for a new era of computational capability that strengthens economic competitiveness, national resilience, and global leadership for Saudi Arabia, the UAE and the whole region.

Regional Vision, Global Intelligence

The Gulf Region stands at the forefront of the global AI economy. At the IDC Middle East CIO Summit 2026, government leaders will have the opportunity to engage with regional peers, global IDC experts, and technology partners to accelerate their transformation journey and realize the benefits of disruptive technologies like AI and quantum.