The Middle East’s artificial intelligence sector is experiencing rapid growth at the start of 2026, with significant investments and advancements across multiple countries. This digest summarizes key developments in AI models, data centers, funding, policy, digital transformation, security, manufacturing, competitions, and events.
AI Model Advancements
TII (Technology Innovation Institute) in Abu Dhabi has launched two notable AI models: the Falcon-H1 Arabic, a high-performance family of Arabic large language models built on a hybrid Mamba-Transformer architecture capable of handling long contexts (up to 256,000 tokens), and the Falcon H1R 7B, a compact reasoning model delivering fast performance with lower energy demands. These releases are significant as they provide efficient and accessible AI capabilities for various applications.
Data Center Expansion
Saudi Arabia has broken ground on the Hexagon Data Centre, set to be the world’s largest government-owned data center at 480 megawatts. This project underscores the country’s commitment to data sovereignty and its digital ambitions under Vision 2030. The scale of this facility signals a substantial investment in AI infrastructure.
Funding and Investment
Red Sea Global and Bunat Ventures have launched a new AI-focused venture fund combining capital with live tourism infrastructure, offering startups real-world testing opportunities. Additionally, MilkStraw AI, a cloud optimization startup, secured $2 million in Seed funding led by VentureSouq, demonstrating increasing investor confidence in the region’s AI ecosystem.
Policy and Legal Frameworks
Qatar is integrating AI into legislative drafting through the Smart Legislative Advisor program, automating legal analysis to accelerate lawmaking. Meanwhile, Abu Dhabi’s Judicial Department is implementing AI-driven projects in correctional centers to enhance security, efficiency, and rehabilitation efforts. The Qatar International Court has also tightened rules on AI use in litigation to maintain judicial integrity.
Digital Transformation and Cybersecurity
Oman has signed an MoU to boost digital transformation projects, focusing on data cleaning, AI-driven solutions, and IoT technologies. Royal Oman Police has established an Artificial Intelligence and Future Technologies Centre to oversee AI strategy and ethics. Kuwait has launched an AI-powered platform to accelerate cybercrime reporting and response, enhancing national cybersecurity resilience.
Manufacturing and Competitions
Borouge completed a proof of concept for AI-powered autonomous operations, showing potential gains in efficiency, downtime reduction, and cost savings. Saudi Arabia, in partnership with AWS and Manara, has opened registration for a Generative AI hackathon to develop national talent in cloud and advanced digital skills.
Regional Partnerships and Events
Middle East AI News has partnered with AI Everything Middle East and Africa, taking place in Cairo on February 11–12, marking growing regional collaboration in AI.
The rapid pace of AI adoption across the Middle East is driven by strategic government investments, private sector innovation, and a growing awareness of AI’s transformative potential. The region is positioning itself as a key hub for AI development and implementation.
