Artificial intelligence-focused startups in the Middle East and North Africa raised a record $858 million in 2025, accounting for 22% of total venture capital investment in the region last year, according to Dubai-based data firm Magnitt.
That growth represents a sizable jump from recent years, when local AI companies captured just a sliver of dealmaking. Magnitt now predicts funding for MENA’s AI startups will easily surpass $1 billion in 2026.
This shift comes as leading Gulf investors have stood out for pouring money into global AI companies lately, from OpenAI to Elon Musk’s xAI, with much less attention paid to homegrown companies. Domestically, venture capital until recently has flowed more readily into fintech, e-commerce and marketplace models built to digitize regional economies, rather than AI opportunities — but the tide appears to be turning.
Details: Magnitt’s annual State of Venture Capital of AI in MENA report, released on Feb. 10, shows AI’s share of VC funding nearly doubled year-on-year, up from 12% in 2024. Between 2022 and 2023, AI accounted for just 6% to 10% of regional funding.
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