As the Gulf Pours Billions Into AI, Indian Startups Become the Region's Go-To Build Partners

The UAE and Saudi Arabia have spent the past two years pouring billions of dollars into AI infrastructure, sovereign AI, and digital transformation. Indian AI startups are increasingly emerging as key partners in that push, gaining enterprise customers across sectors from banking and healthcare to retail and energy.

The Gulf has become a strategic growth market for Indian AI companies as the region is one of the world's fastest growing buyers of enterprise AI.

Why the UAE specifically has become the preferred entry point

"The US continues to be one of the largest markets for Indian startups. What we are seeing is that the Gulf, particularly the UAE, has emerged as a strategic growth market over the last few years," Shivendra Singh, vice president and head of global trade development at Nasscom, told EnterpriseAM.

Strong enterprise demand, progressive AI policies, regulatory sandboxes, and the UAE's role as a gateway to the wider MENA region make the Gulf an increasingly attractive market for Indian AI startups, Singh said. "Governments in markets such as the UAE and Saudi Arabia are also major buyers and early adopters of AI," added Vijay Gopalakrishnan, partner at Deloitte India. Combined with sovereign AI funding, business friendly regulation, and strengthening India-GCC trade ties, these factors have created prospects particularly in financial services, retail, energy, and government services, a pattern consistent with how Gulf governments have positioned AI adoption as a matter of national competitiveness rather than a purely corporate initiative across nearly every sector of the economy.

India's AI ecosystem has scaled fast enough to export

India now has more than 3,100 AI startups and ranks third globally in AI capability, up from seventh last year, according to a report by Zinnov, Indiaspora, and Activate. A growing number of mid stage companies have already proven their technology and are now looking to scale internationally, creating a pipeline of firms ready to tap overseas demand.

The trend is already visible on the ground. Companies including Fractal, Yellow.ai, Uniphore, Kore.ai, Gnani.ai, Observe.AI, Whatfix, and MathCo have established customers or operations across the GCC, while Abu Dhabi's Hub71 has emerged as a preferred landing pad for Indian AI startups entering the region.

What is actually pulling Indian AI companies toward the Gulf

"The first reason why Indian AI startups are eyeing Gulf expansion is the availability of high quality, systematic data," Shravan Bhati, co-founder and CEO of SatLeo Labs, told EnterpriseAM. "The second reason is the region's willingness to adopt new technologies." That combination allows startups to build better AI models while finding customers willing to deploy new solutions faster than in many mature markets, he said, adding that this is why many Indian AI companies choose the Middle East as their first international market.

Dhruv Bhatia, head of international business at healthcare AI startup 4baseCare, said Gulf governments have made AI a national priority, with genuine willingness to adopt technologies that improve patient outcomes. Healthcare providers have continued investing in AI despite geopolitical uncertainty because technologies that improve clinical outcomes remain a priority, he said. "For 4baseCare, the decision to expand to the Gulf was driven by a clear healthcare need rather than market expansion alone. We saw a window to combine our genomics expertise, AI driven clinical decision support, and laboratory capabilities to address that gap," Bhatia added.

"The combination of bottom up enterprise demand and top down government mandate is what's pulling Indian AI companies into the region right now," said Ahshad Jussawala, CEO of Reliance affiliated AI company Jio Haptik. For Haptik, the pivot to the Gulf was inbound, with UAE and Saudi enterprises asking the company to solve problems it had already solved for India's consumer scale market.

Real challenges remain despite the momentum

Although the GCC region has significant financial resources, buyers can still be price sensitive, Gopalakrishnan cautioned. "Clients in the region are also highly demanding, and Indian AI startups must be prepared to manage these expectations," he said. Besides that, the need to provide AI solutions that address local Arabic language requirements, along with geopolitical uncertainty and associated security concerns, are key challenges for Indian startups, a gap that has already prompted homegrown alternatives such as Falcon, the UAE built large language model designed specifically for deeper Arabic language comprehension, positioning it as a complementary rather than competing option for enterprises balancing local language needs against imported AI capability.

A corridor expected to keep growing

The India-GCC AI corridor is likely to continue booming over the next three to five years, experts say, with Gulf establishments increasingly looking at Indian AI startups for their strong engineering capabilities, speed of execution, and the ability to build scalable AI solutions.

"For many Gulf enterprises, Indian startups are innovation partners who understand emerging markets and can support long term digital transformation. While cost competitiveness remains an advantage, the bigger differentiator today is the ability to co-innovate and deliver AI solutions at scale," Singh said.