Artificial intelligence is expected to contribute up to 14 per cent to the UAE's gross domestic product — equivalent to $97.9 billion — by 2030. Khushnum Bhandari / The National
Artificial intelligence is expected to contribute up to 14 per cent to the UAE's gross domestic product — equivalent to $97.9 billion — by 2030. Khushnum Bhandari / The National
Artificial intelligence is expected to contribute up to 14 per cent to the UAE's gross domestic product — equivalent to $97.9 billion — by 2030. Khushnum Bhandari / The National
Artificial intelligence is expected to contribute up to 14 per cent to the UAE's gross domestic product — equivalent to $97.9 billion — by 2030. Khushnum Bhandari / The National

UAE to boost number of specialised AI laboratories in the country


Alkesh Sharma
  • English
  • Arabic

The Emirates plans to boost the number of specialised artificial intelligence laboratories in the country and accelerate AI research initiatives, the UAE Council for Artificial Intelligence and Digital Transactions said.

The council held its first meeting of the year remotely on Tuesday and reviewed the outputs of the first phase of its agenda, state-owned news agency Wam reported.

The first phase included the graduation of more than 260 AI experts from a specialised programme, developed in co-operation with Kellogg College at the University of Oxford.

The programme, which featured participants from 90 local and federal government entities, aims to equip graduates with the skills to use AI technologies in their work, in line with the UAE's National AI Strategy 2031.

The UAE government has an extremely “advanced infrastructure”, which is a key driver for digital transformation and for enhancing efforts to utilise technology to streamline procedures in related services, Wam quoted Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Teleworking Applications, as saying.

The UAE, the Arab world's second-largest economy, is projected to benefit the most in the Middle East from AI adoption. The technology is expected to contribute up to 14 per cent to the country’s gross domestic product — equivalent to $97.9 billion — by 2030, a report from consultancy firm PwC showed.

The council, which is overseeing the UAE’s AI strategy, aims to expand the use of the technology, promote online transactions in various areas, encourage the exchange of knowledge, attract talent and recommend guidelines to boost innovation and research.

During the meeting, the council's subcommittees also presented their implementation plans, their key objectives for the next phase and the proposed success indicators, Wam reported.

The UAE Cabinet adopted the national AI strategy 2031 in April 2019. The wide-ranging initiative will involve the rapidly developing technology being integrated into all sections of society — from government services to education.

The country has also established the Mohamed bin Zayed University of Artificial Intelligence to support the advancement of research, development, transfer and practical use of AI.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: February 23, 2022, 7:27 AM