UAE and UK deepen strategic focus on AI, clean energy and resilience amid strong investor confidence

Investor confidence in the UAE’s economy seems to have stayed pretty strong, even after several months of regional turmoil. During a parliamentary reception in London, top Emirati and British officials argued that the next phase of their relationship should focus on areas like artificial intelligence, clean energy, life sciences, and developing skills.

The event, hosted by the UAE-UK Business Council at the House of Lords, brought together over 160 parliamentarians, diplomats, and business leaders. Among the attendees were Lord Stockwood, the UK minister of state for investment, Mansoor Abulhoul, the UAE ambassador to the UK, Badr Jafar, who serves as the UAE’s special envoy for business and philanthropy, Sir Oliver Dowden, Lord Udny-Lister, and executives from companies that have interests in both markets.

Jafar told the gathering that while UAE confidence had been tested by external shocks, it certainly hadn’t been broken. He emphasized that the UAE and the UK share similar views on open markets, trade based on clear rules, and innovation-driven growth, and that these shared perspectives have helped strengthen their investment relationships. He also mentioned that the UAE’s sovereign investment partnership with the UK already committed nearly three times its initial target in less than four years. Looking ahead, he noted that the focus wouldn’t just be on the size of investments, rather, where and how the money is deployed would really matter.

That sector-specific focus reflects a broader shift in both countries’ economic strategies. The UAE has been positioning itself as a hub for advanced tech, logistics, energy transitions, and knowledge industries for a few years now. Meanwhile, the UK has been seeking long-term capital to support promising sectors and diversify its global economic portfolio. At the reception, the message from both sides was pretty clear: the relationship is moving beyond just diplomatic goodwill and into more targeted industrial collaborations.

Lord Stockwood mentioned that the UK has stood by the UAE during some tough times and reaffirmed that their bilateral relationship remains one of Britain’s most crucial. He also raised concerns about global supply chains, including smooth movement of goods through the Strait of Hormuz, which continues to be vital for regional trade and energy flows.

The UAE’s ability to keep business running smoothly has become an important part of its appeal to investors. Even with attacks on critical infrastructure and disruptions along regional trade routes, the country has managed to keep banking, telecoms, electricity, and logistics systems running without major hiccups. Ports on the east coast, including Khor Fakkan and Fujairah, continue to serve as cargo gateways and oil terminals, with land routes crossing the Gulf helping keep goods flowing.

This resilience is backed by official support for the financial system. The UAE’s Central Bank has injected liquidity into the markets and banks, while officials project around 5.6% economic growth in 2026, with inflation capped at about 1.3%. These figures suggest an economy that officials want to be seen not just as stable, but as capable of handling shocks better than many of its peers.

The UAE is also benefiting from bigger structural trends. At the event, figures showed that last year, the country attracted a record US$45.6 billion in foreign direct investment, almost 50% more than the year before. Earlier this month, it entered the top ten global exporters in the WTO rankings for the first time, up from 17th just five years earlier. Plus, it’s negotiated 35 economic partnership agreements across four continents, making it easier to access markets and facilitating trade.

These shifts help explain why international capital keeps flowing into the country. Jafar pointed out that major investors like BlackRock and Brookfield are still very active, and firms such as Hillhouse, Barings, and Bain have recently set up offices in the UAE. His point was that countries with resilient investment strategies are better placed to withstand market volatility. Interestingly enough, this theme resonates particularly with climate-tech investors in the Gulf, where policymakers are trying to balance energy security, digital infrastructure, and decarbonization efforts.

On the UK’s side, the importance of the relationship is no less clear. Bilateral trade has now surpassed £25 billion a year, and over 14,000 UK exporters are active in the UAE market. The UAE-UK Sovereign Investment Partnership, launched in 2021 with an initial target of £10 billion over five years, has already committed nearly £30 billion through over 50 direct investments. It has created around 48,000 UK jobs so far, with projections of 280,000 more by 2030.

While the partnership originally focused on life sciences, initially including £1 billion in investments backed by Mubadala and UK funds, it has since expanded into a broader strategic platform. This platform links sovereign investments with sectors that both governments see as crucial for future competitiveness.

Lord Udny-Lister emphasized that now, businesses from both sides should leverage each other’s markets as springboards into faster-growing economies elsewhere. He also highlighted the importance of co-investing in areas like data, clean energy, and life sciences. Moreover, he argued that both countries need to champion open and fair international trade, especially as protectionist measures gain ground globally.

Skills and workforce development received significant attention at the event, which saw the launch of a white paper on collaboration in qualifications and assessments. Its recommendations stressed mutual recognition of professional credentials, joint development of apprenticeships, and making technical education more inclusive, especially for women. This agenda matters because the UAE’s growth model heavily relies on attracting and keeping high-skilled talent.

Recent data from KPMG backs this idea up. The Middle East CEO Outlook reports that 84% of UAE business leaders plan to grow their workforce over the next three years, and 80% are optimistic about their companies’ prospects. The survey also showed strong confidence in AI governance, 92% of UAE CEOs are comfortable with it, much higher than the global average. That aligns with broader policies pushing AI integration across the economy, while also emphasizing digital literacy and reskilling.

The IMF also recognizes the UAE’s push into AI. At the World Government Summit in Dubai earlier this year, Managing Director Kristalina Georgieva highlighted how high AI adoption among working-age adults gives the country a major advantage for future growth. Meanwhile, the World Economic Forum notes that the UAE is trying to match its AI ambitions with sustainability goals, especially as it develops data-intensive infrastructure and autonomous systems.

All in all, the London reception suggested that the UAE-UK relationship is no longer simply about trade quantities or diplomatic statements. Instead, it’s increasingly about turning capital, talent, and policy alignment into tangible, long-term cooperation, especially in sectors that will shape the next decade.