AI can add billions of dollars to Middle East economies, new report shows
AI and climate action could lift Middle East GDP to $4.68 trillion by 2035: PwC
Dubai: The Middle East could unlock a staggering $232 billion in additional economic value by 2035 through widescale artificial intelligence (AI) adoption and decisive action on climate resilience, according to a new PwC Middle East report released today.
Titled “Value in Motion: The Middle East’s Time to Lead is Now”, the research outlines three economic scenarios for the region, highlighting how AI disruption, environmental risks, and sector convergence could reshape the future and redefine growth opportunities.
PwC’s modelling shows that in an optimal future where AI is embraced responsibly and climate threats are proactively mitigated, the Middle East’s GDP could rise to $4.68 trillion by 2035—up from $3.57 trillion today, representing a $1.11 trillion jump in total value.
AI push for next-gen productivity
The report projects that AI alone could boost regional GDP by 8.3% by unlocking productivity across industries. But this potential is only achievable if governments and businesses collaborate to adopt AI responsibly, scale digital infrastructure, and close capability gaps.
“The decade ahead will challenge the region’s imagination and capabilities like never before,” said Stephen Anderson, Chief Strategy & Technology Officer at PwC Middle East. “To stay ahead, businesses and governments must act with pace, purpose, and partnership.”
Climate is hidden risk to economies
Despite promising growth forecasts, the region faces a stark warning: without climate adaptation, Middle Eastern economies could lose 13.9% of GDP due to physical climate risks such as water scarcity, extreme heat, and flooding.
When these risks are factored into a business-as-usual scenario, the region’s projected GDP drops from 41.8% growth to just 27.9% by 2035. That 13.9-point difference represents more than just missed economic opportunity—it underscores a pressing need for climate-conscious development.
Energy-tech nexus offers global edge
Rather than looking at growth through traditional sector lenses, PwC introduces a new model structured around ‘domains of growth’—interconnected ecosystems such as how we move, fuel, build, care, compute, and connect.
These domains reflect how emerging needs are driving businesses to break down silos, form cross-industry alliances, and reinvent service models.
“Striking the right balance between scalable AI and affordable clean energy will define the region’s leadership,” said Dr. Yahya Anouti, Partner at Strategy and PwC Middle East Sustainability Platform Leader.
The report emphasizes that the Middle East is uniquely positioned to lead, thanks to its access to the world’s lowest-cost renewable energy, growing AI infrastructure, and bold national visions across the Gulf. Hyperscalers are already investing in the region, with clean energy expected to power the next generation of AI innovation.
Call for cordinated action worldwide
PwC calls on governments, businesses, and academia to take coordinated action:
Governments are urged to redesign institutions for evolving needs—such as ministries of care or mobility—and to create dedicated funds for AI in public services.
Businesses are advised to localize, digitize, and decarbonize operations while investing in supply chain resilience and cross-sector partnerships.
Academic institutions must cultivate future-ready talent and embed entrepreneurship into education systems.
With the right strategies, the Middle East can transform from a regional player into a global innovation leader, harnessing the power of AI and climate resilience to drive long-term economic sustainability.
"The value is already in motion—now is the time to act," the report concludes.
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