Artificial Intelligence is no longer a horizon technology in the Gulf—it is already reshaping the foundations of the region’s economies. Yet, in the rush to quantify AI’s GDP contribution or celebrate infrastructure breakthroughs, we risk missing the deeper transformation underway. In the GCC, AI is not simply a tool of productivity; it is becoming the catalyst for a profound reconfiguration of work, value creation, and the very social contract that has governed state-society relations for decades.

This article draws from Strigence’s July 2025 report, "The AI-Powered Gulf: Navigating Job Market Transformation and a New Social Contract in the GCC," to distill its key findings, add strategic interpretation, and outline the decisions facing regional leaders.

A Global Reshuffling, Not a Great Replacement

The global narrative around AI and employment has matured. Dystopian fears of mass unemployment are giving way to a more complex, but no less urgent reality: a massive reallocation of work. Globally, AI is expected to create more jobs than it displaces, but with a radically different skill profile. What we are witnessing is not a Great Replacement, but a Great Reshuffling.

According to the World Economic Forum, 170 million new roles will emerge by 2030 while 92 million will be displaced—a net gain of 78 million jobs. But these jobs won’t look like the ones we’re used to. They demand a hybrid of technical proficiency and human-centered competencies. Workers who can master both will thrive. Those who rely solely on routine tasks face growing precarity.

In this new paradigm, value is migrating toward two poles: highly technical AI and data skills, and deeply human capabilities like creativity, leadership, and emotional intelligence. Those who possess both command a premium. Those with neither face obsolescence.

The GCC’s Unique Challenge: Transformation at Triple Speed

Unlike other regions, the GCC is not merely adapting to AI—it is attempting to lead it. Saudi Arabia, the UAE, and Qatar have launched bold national strategies to position themselves as global AI players. But this ambition creates a triple-speed challenge:

1. Technological Velocity: The pace of AI adoption is outstripping policy, education, and regulatory frameworks.

2. Workforce Transition: The shift from routine, automatable work to high-value knowledge roles is occurring faster than national labor markets can absorb.

3. Socioeconomic Redesign: The traditional model of citizen employment through public sector entitlements is breaking down, without a fully articulated alternative.

This is not a skills gap. It is a systemic realignment of how economies function.

This ambition-reality gap is visible across key indicators. According to BCG’s ASPIRE framework, GCC nations score near the top globally on AI ambition, but fall significantly behind on execution metrics like AI skills, research output, and startup activity. For example, while Germany boasts over 40,000 AI professionals, the UAE and Saudi Arabia each have fewer than 10,000.

A Tiered Gulf: Divergent AI Pathways

AI is not impacting the GCC uniformly. Our report categorizes nations into three tiers:

• Pioneers: Saudi Arabia and the UAE, deploying massive capital, policy reforms, and infrastructure to leap ahead

• High-Skill Adapter: Qatar, which has the human capital base to absorb AI productively

• Pragmatic Followers: Bahrain, Kuwait, and Oman, emphasizing governance, ecosystem building, and selective sector focus

Each strategy is valid—but each carries different risks. For the Pioneers, the risk is overreach without sufficient national talent to execute. For the Followers, it’s falling behind the AI curve altogether. For Qatar, the challenge is transitioning a highly public-sector-employed national workforce into private, AI-enabled roles.

This tiered lens is critical. There is no single AI journey in the Gulf—there are multiple tracks with different speeds and destinations.

The Dual Labor Market Dilemma

No transformation in the Gulf can be understood without acknowledging the dual labor market: a small, national workforce and a large, expatriate one. AI is poised to automate the very jobs most commonly held by expatriates—admin, customer service, logistics—which aligns with nationalization goals. But here lies the paradox: the new jobs AI creates require elite technical skills that most nationals do not yet possess.

This creates a risk of a new form of dependency: not on low-cost foreign labor, but on high-skilled global talent. In Saudi Arabia, for instance, job postings for AI specialists are growing at over 50% per year, while the talent supply remains critically thin. Nationalization efforts like Saudization may therefore struggle to meet AI-driven labor demands without parallel upskilling revolutions.

From Skills Gap to Speed Gap

What truly threatens the GCC’s AI future is not a lack of ambition or infrastructure. It’s the speed mismatch between technological change and workforce preparation. Traditional education systems, built for stability, cannot keep pace with technologies that evolve quarterly.

The region must embrace a radical new model of lifelong, just-in-time learning—integrated into work, personalized by AI, and co-designed with industry. Technical skills are not enough. Future readiness requires a trifecta: digital literacy, deep expertise, and human adaptability.

UAE has taken the lead here. From integrating AI into K-12 curricula to launching national upskilling platforms and attracting top talent with flexible visa policies, the country is engineering a broad societal transition. But gaps remain. A full 72% of employers still cite skills shortages as their number one barrier to AI adoption.

Sectoral Rewiring: One Size Will Not Fit All

Different sectors require different AI strategies:

• Energy: Optimize and decarbonize core operations. Saudi Aramco is using AI to reduce costs and emissions in exploration and logistics.

• Finance: Manage risk, personalize experiences, ensure compliance. UAE and Saudi banks are deploying AI for real-time fraud detection and advisory services.

• Logistics: Predict, automate, and streamline flows. Qatar’s Milaha is embedding AI into warehouse and delivery management.

• Public Sector: Redesign citizen services and governance models. Dubai Police and Saudi ministries are using AI for predictive policy and service delivery.

Sector-specific policy, talent, and regulatory alignment will be essential. There is no room for generic digital transformation.

Scenarios for 2040: What Future Will We Choose?

The report outlines three scenarios:

1. AI-Powered Renaissance: Inclusive growth, global competitiveness, and a skilled citizenry. Public sector is lean, and private sector drives innovation.

2. The Gilded Cage: AI delivers economic growth, but social stratification worsens. Nationals are excluded from new jobs, and welfare costs rise.

3. Fragmented Progress: UAE and Saudi surge ahead, while other GCC nations struggle to scale talent and transformation.

These are not just forecasts—they are forks in the road. And the direction will be determined by policy coherence, speed of reform, and the region’s ability to unite its economic and human capital strategies.

A New Social Contract for a Post-Oil Era

The traditional Gulf model—public sector jobs for citizens, funded by hydrocarbons—is unsustainable. AI is accelerating its demise. The new model must be built on different foundations:

• The State as enabler, not employer

• The Citizen as lifelong learner and adaptable economic actor

• The Expat as elite contributor, not bulk labor source

This reimagined contract must support upward mobility, innovation, and dignity of work. It must also recognize that in the AI economy, the true social safety net is not a job guarantee—it is a skills guarantee.

Conclusion: The True Test of AI in the Gulf

The GCC has the resources, the ambition, and the urgency. What it must now build is the execution capacity, human capital, and institutional agility to match.

AI will not only transform the economy. It will test the region’s ability to lead not just in technology, but in reimagining prosperity itself.

Strigence's July 2025 report offers the full data, models, and policy recommendations behind this article. For leaders, educators, investors, and strategists shaping the future of the Gulf, it is essential reading.

Download the full report here →