How Middle East can become a global hub for fintech, AI

Without doubt, financial technology and artificial intelligence are two of the most transformative industries reshaping economic structures, productivity, and global competitiveness.
When it comes to AI, current projections indicate substantial expansion, with one widely cited trajectory suggesting the global AI market will climb to between $407 billion and $990 billion by 2027, rising toward $1.6-$3.6 trillion by the early to mid 2030s. What is intriguing is that the compound annual growth rates are frequently estimated in the 20-30 percent range depending on scope and methodology.
Generative AI — a kind of artificial intelligence that creates content such as images, texts, videos, and computer codes — is forecast to increase from tens of billions to hundreds of billions over the same time period. This is why companies’ adoption has accelerated, with surveys showing high percentages of organizations integrating AI into at least one business function.
Fintech, which consists of areas such as digital payments, lending platforms, wealth management tools, neobanks, and blockchain applications, has become a major sector as well. Global fintech revenues reached roughly $500-650 billion last year, growing at about 22 percent year on year, substantially outpacing traditional financial services. It is estimated that sustained growth could push this sector toward $2 trillion by 2030.
These industries are critical because they drive efficiency and productivity across sectors such as healthcare, energy, logistics, public administration, and capital markets. However, what makes them especially powerful is their convergence. For example, AI enhances fraud detection and personalized advice, while fintech provides data feedback that improves and refines AI systems.
Nations and regions that establish leadership positions will most likely capture disproportionate shares of these benefits, value creation, talent, and influence in the emerging digital economy.
The Middle East possesses structural advantages that position it to compete as a global center for both of these domains. First, the region has a large, youthful demographic; in many countries, roughly half the population is under 30, creating a sizable cohort of digitally native potential workers, entrepreneurs, and consumers. 

The Saudi Data and AI Authority leads a national strategy targeting substantial AI investment.

Dr. Majid Rafizadeh

This contrasts with aging populations in Europe and parts of East Asia, and offers a potential demographic benefit if skills development and job creation keep pace. The good news is that sovereign wealth funds across the Gulf Cooperation Council command assets measured in the trillions of dollars, providing capital for long-horizon infrastructure and technology investments.
One pillar of the infrastructure is linked to energy resources that supply the abundant and relatively inexpensive power required for AI data centers and cooling systems.
Digital infrastructure has also advanced rapidly in leading markets, with expanding 5G networks, cloud capacity, and data center buildouts. The Middle East’s strategic location between Europe, Asia, and Africa also facilitates connectivity, talent mobility, and market access.
Meanwhile, growing technological talent in the region, supported by expanding university programs as well as international partnerships, further reinforces these critical foundations and infrastructure.
Gulf states, particularly Saudi Arabia and the UAE, have already taken decisive steps to build AI and fintech ecosystems. The Kingdom’s Vision 2030 frames economic diversification around knowledge and technology. The Saudi Data and AI Authority leads a national strategy targeting substantial AI investment, hundreds of AI and data startups, and workforce development.
Data center capacity has expanded markedly — from low tens of megawatts earlier in the decade to several hundred megawatts by 2025-2026. The technology workforce has grown significantly, and 2026 has been designated the Year of AI. Sovereign-backed initiatives and partnerships with global technology firms are also showing commitment to Arabic-language models.
In addition, the UAE took early action such as appointing a minister for AI and launching a national strategy aiming for leadership by 2031. Institutions such as the Mohamed bin Zayed University of Artificial Intelligence, the technology group G42, and the investment platform MGX have been playing key roles as well. Both countries have attracted investment and have positioned themselves as testbeds for AI applications in sectors such as government services, energy, and logistics.
In fintech, the same markets have developed healthy ecosystems. Islamic fintech represents a distinctive regional strength: The global market, heavily weighted toward GCC and other OIC countries, was estimated near $200 billion in transaction volume in the mid-2020s and is projected to grow at double-digit rates toward $340 billion by the end of the decade, with Saudi Arabia the largest single market.
Other Middle Eastern countries can build on these precedents through concrete action, long-term vision, and realistic strategies. First, they need to articulate coherent national digital and AI strategies aligned with their broader economic plans.
Second, it is important to invest in foundational digital infrastructure. Third, expand human capital programs such as STEM education, specialized AI and data curricula, and incentives for female participation. Fourth, mobilize domestic and regional capital. Fifth, develop niche strengths, such as Islamic finance technology and Arabic natural-language processing, rather than attempting to replicate other global trends.
Without doubt, there exist challenges, yet the convergence of several issues — the region’s talent, demographic vitality, financial resources, energy advantages, and policy ambitions — is creating a rare window and opportunity for the Middle East.

• Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist.
X: @Dr_Rafizadeh