Key takeaways on tech investment in the GCC for 2026
- Technology has remained active despite softer overall M&A volumes, with TMT activity increasing in H1 2026.
- Saudi Arabia and the UAE remain at the centre of regional technology activity, although investment takes several forms beyond traditional M&A.
- AI is attracting a growing share of capital, alongside investment in compute, data centres and supporting infrastructure.
- AI investment creates opportunities and new areas of exposure, including model dependency, data, infrastructure costs and disruption to existing software businesses.
- As technology becomes increasingly central to the investment thesis, scalability, differentiation, costs and technology dependencies deserve greater attention from investors.
Where is GCC technology investment going?
“Technology investment” covers an increasingly broad range of assets in the GCC. Traditional acquisitions of software and technology-enabled companies are only one part of the picture.
EY reports investor interest in AI-driven solutions, enterprise digitalisation, software platforms and technology-enabled business services. Venture capital provides another indication of where activity is developing. MAGNiTT identified FinTech, Enterprise Software and AI among MENA’s most investable sectors and technologies in 2025, with Saudi Arabia and the UAE accounting for the majority of capital deployed.
Alongside investments into companies, significant capital is being directed towards the infrastructure supporting the digital economy. This includes data centres, cloud infrastructure and computing capacity.
These different investment categories demonstrate the breadth of the technology activity currently taking place across the region.
AI is becoming a defining investment theme
AI is the most visible part of this activity. According to MAGNiTT, AI accounted for 22% of total MENA venture funding and 29% of deal volume in 2025, with capital deployed into AI increasing more than threefold year on year. The UAE and Saudi Arabia accounted for the majority of that activity.
The scale of the AI story is also difficult to capture through conventional transaction statistics.
PwC notes that some of the GCC’s largest digital investments are being made through partnerships, infrastructure investments and greenfield developments, rather than acquisitions. Stargate UAE’s planned Abu Dhabi compute cluster and the expansion of Saudi Arabia’s HUMAIN are examples.
This distinction matters. Investment into AI applications represents only one layer of the market. Capital is also going into the compute, infrastructure and data capacity required to develop and operate them.
The AI opportunity extends beyond AI companies
For investors, AI thus raises two distinct questions: Is the product AI-ready? Is the infrastructure built to support the growth ambition?
Measuring AI-Readiness
The first concerns companies that sell AI products or present AI as a significant part of their technology. Here, the challenge is understanding what actually constitutes the asset. A proprietary model, an application built on a third-party model and a conventional software product incorporating AI features represent very different technology propositions and value creation opportunities.
Evaluating AI disruption
The second concerns AI disruption. A company does not have to develop AI to be materially affected by it. Existing software products can face new competitors, changing customer expectations or opportunities to automate parts of their own operations.
Investors therefore need to consider both AI readiness and AI exposure. The growth of AI investment increases the importance of understanding where genuine technological differentiation exists and where value remains dependent on technology controlled by third parties. It also increases the need to understand what new risks or opportunities this technology brings to the investment funds.
Digital infrastructure is part of the investment equation
The expansion of AI also places infrastructure more firmly within the technology investment discussion.
PwC highlights the scale of compute infrastructure being developed in the UAE and Saudi Arabia, much of which sits outside conventional M&A statistics. These investments support ambitions around AI, but their implications extend to the broader digital ecosystem.
For companies building on this infrastructure, the investor question is partly one of economics. Cloud and compute costs can have a direct impact on margins, particularly for businesses processing large volumes of data or operating computationally intensive AI models.
Is my asset scalable and at what cost?
Infrastructure also influences performance and scalability. A technology business growing rapidly may require significant additional investment to support that growth. Understanding the relationship between revenue ambitions, architecture and future technology expenditure is therefore important when testing a business plan.
For investors, growth expectations should also be tested against the technology supporting them.
- Can the platform accommodate the volumes assumed in the business plan?
- Can it be deployed efficiently across additional markets?
- What additional infrastructure expenditure will be required?
- Are there technology dependencies that could restrict future development?
The objective is not simply to identify technical weaknesses. Technology assessments, such as tech due diligences can also reveal upside: opportunities to optimise infrastructure expenditure, improve development processes, consolidate technology following acquisitions or accelerate a product roadmap.
Identifying risks and opportunities of AI in an investment
As AI attracts more capital, assessing the technology itself becomes increasingly important.
An investor looking at an AI-related asset may need to understand which models are proprietary, which are provided by third parties, how data is sourced and governed, what computing resources are required and where specialist knowledge resides within the organisation.
Model performance is another part of the equation. A compelling demonstration does not by itself establish whether a system can operate reliably at scale, whether its costs are sustainable or whether its underlying technology creates a defensible position.
This is an area we increasingly examine when assessing technology assets at Vaultinum. AI maturity needs to be considered in the context of the company’s business model, data, infrastructure, people and roadmap, rather than through the presence of AI features alone.
How does technology and AI due diligence support investors in the GCC region?
The technology activity visible across the GCC in 2026 presents a broader question for private equity and other investors: does the technology underneath an attractive company support the investment thesis?
That requires connecting technical characteristics with financial and strategic assumptions.
- Scalability affects the ability to deliver growth.
- Infrastructure and compute affect costs.
- Architecture and technical debt can translate into future investment requirements.
- Third-party dependencies can affect differentiation and intellectual property.
- AI can represent an asset, an enabler or a source of disruption.
Technology due diligence therefore has a wider role than identifying technical red flags. It can help establish what additional investment the technology may require, where value creation opportunities exist and whether the asset can support the strategy planned for it after acquisition.
At Vaultinum, we see technology due diligence as more than a red-flag exercise done ahead of signing. It is a tool investors should use to pressure-test the entire investment thesis. In the GCC region, where AI and infrastructure investment are moving faster than most transaction processes can absorb, understanding what additional investment the technology will require, where real value creation opportunities exist, and whether the asset can support its post-acquisition strategy is a precondition for underwriting a risk-controlled deal.
The GCC technology story is broader than capital deployment
H1 2026 provides evidence that technology continues to attract investment in the GCC despite a more selective wider transaction environment. AI is an increasingly significant part of that picture, alongside the infrastructure required to support it.
For investors, however, capital deployment tells only part of the story. As technology assets become more sophisticated, understanding what has actually been built, how it scales, what it costs to operate and where its dependencies lie becomes increasingly relevant.
The opportunity is therefore about more than exposure to technology growth. It is about understanding whether the technology underneath the business can deliver what the investment thesis expects from it.
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Sources
PwC, TransAct Middle East: 2026 mid-year update, July 2026:
https://www.pwc.com/m1/en/publications/transact-middle-east-2026-update.html
EY, MENA M&A Insights H1 2026, August 2026:
https://www.ey.com/en_pk/newsroom/2026/08/ey-mena-m-a-report-390-m-a-deals-valued-at-us-46-7b-completed-in-h1-2026
MAGNiTT, FY 2025 State of Venture Capital in MENA:
https://www.magnitt.com/research/FY-2025-MENA-VC-Report-51018
MAGNiTT, FY 2025 State of Venture Capital of AI in MENA:
https://www.magnitt.com/research/FY-2025-State-of-Venture-Capital-of-AI-in-MENA-51029
