UAE accelerates industrial transformation with focus on AI and local investment

The UAE is gradually reshaping its industrial future, placing bigger bets on artificial intelligence, cutting-edge manufacturing, and a more proactive role for local investors. During the Make it in the Emirates 2026 event, senior officials and business leaders emphasized how quickly the country’s investment landscape is evolving, hinting at a real shake-up in traditional models.

On the third day of the event in Abu Dhabi, Mohamed Hassan Alsuwaidi, the Minister of Investment, highlighted that AI is now attracting more funding than any other sector in the UAE’s entire history. He pointed out that the scale of these projects is so enormous that the usual language we use around foreign direct investment (FDI) no longer quite captures what’s happening. Instead, he proposed we think in terms of “Domestic Direct Investment,” or DDI, as a way to better recognize and value the growing importance of home-grown investors.

His comments aren’t just about AI, they reflect a broader shift in the country’s economic strategy. Along with the inflow of global tech capital, officials are increasingly focusing on local participation, supply chain robustness, and industrial sovereignty. Alsuwaidi mentioned that data centers alone could cost more than ports or airports , we’re talking hundreds of billions of dollars, really. This comparison strongly suggests how deeply AI infrastructure is starting to reshape the country’s capital needs and priorities.

The event itself has turned into a key showcase for the UAE’s industrial ambitions. According to the organizers, Make it in the Emirates now runs in its fifth year and aims to bring together manufacturers, investors, policymakers, and anchor buyers. It’s not just about attracting factory investments, but also about boosting local manufacturing, enriching industrial value chains, and enabling companies to produce, grow, and export directly from the UAE.

Interestingly enough, just days before the Abu Dhabi sessions, the Ministry of Industry and Advanced Technology announced a hefty AED 18 billion in competitive financing for the industrial sector. This package included partnerships with Mashreq Bank, Dubai Islamic Bank, and Emirates Development Bank , all real steps toward expanding local production capacity and supporting manufacturers looking to grow right here at home.

Technology adoption was a big focus during the forum, too. One session centered on expanding industrial tech at scale, where executives sounded the alarm , global adoption is still painfully slow, especially among companies that are still grappling with basic connectivity or digital readiness. The message? Companies that drag their feet on investing in new tools risk falling behind competitors who are already weaving AI into their operations, planning, and maintenance routines.

Maitha Al Suwaidi, Microsoft’s chief strategy officer in the UAE, argued that the country already leads the world in AI adoption, with about 64% of its working population using generative AI tools. She emphasized that the UAE’s strength lies in its people, not just infrastructure. According to her, it’s the human capital that will determine whether the country maintains its edge. This point is especially relevant when you think about climate tech , because, honestly, the adoption depends on operators, engineers, and regulators just as much as it does on fancy software or hardware.

The impacts of AI are already making waves in sectors like energy. Musabbeh Al Kaabi, CEO of ADNOC Upstream, shared that AI helped the company slash shutdown times by nearly half. That’s a big deal in an industry where unplanned stoppages are among the priciest disruptions. The benefits aren’t solely financial either , better uptime and predictive maintenance can also lead to less waste and lower emissions. Al Kaabi mentioned that they’re still only beginning to understand AI’s full potential.

The event also connected industrial policy with the UAE’s sustainability goals. Onoud Al Marzooqi, director of industrial development at the Abu Dhabi Investment Office, explained how the country’s tech strategy ties into broader priorities like nurturing Emirati talent and hitting the Net Zero 2050 target. The interesting part? In the UAE, industrial growth is expected to go hand in hand with decarbonization efforts, rather than compete with them.

One example discussed was rPET , recycled polyethylene terephthalate used in packaging and other products. Yousef Mohamed Al Marzooqi from the Ministry stressed that clear regulations can actually accelerate investment, viewing rules not as a barrier but as enablers of industrial growth. In his view, even packaging can be an economic opportunity, beyond just environmental concern.

That perspective reflects a broader trend in the UAE’s climate and industrial policies, where recycling, circular economy materials, and cleaner supply chains are becoming part of the same investment conversation as digital infrastructure and advanced manufacturing. The idea is pretty straightforward: If the UAE wants to ramp up new industrial capacity quickly, it needs to coordinate standards, financing, and procurement to work toward common goals.

Later in the day, the focus shifted to supply chains. His Excellency Matar Ali Al Romaithi from the Tawazun Council for Defense Enablement talked about plans for a pioneering facility to support companies establishing local operations and… well, to help localize production. The goal? Building a supply chain that guarantees sovereignty, but also gives international companies a way into the regional market.

All in all, what Abu Dhabi seemed to suggest is that the UAE is entering a more mature phase of its industrial strategy. The country is still courting tech giants from abroad but is increasingly aiming to ensure that local investors, talented Emiratis, and regional suppliers capture more of the value created by the new AI-driven economy. For climate tech firms eyeing the UAE, that’s especially important , because it points to a market where digital tools, innovative manufacturing, and sustainability objectives are becoming inseparably linked. And honestly, I think the next wave of growth here may hinge just as much on local industrial capacity as it does on foreign investment.