Why UAE businesses are ahead in AI adoption, reveals IBM’s Lula Mohanty
IBM is actively partnering with public and private sector players to bring AI to life in the UAE
28 July, 2025
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The UAE has emerged as a surprising but confident frontrunner in AI governance, according to a new IBM study. Developed by the IBM Institute for Business Value (IBV) in collaboration with the Dubai Future Foundation, the report reveals that UAE businesses lead the world in appointing Chief AI Officers (CAIOs), a sign that organisations here see AI not just as a tech upgrade, but as a critical enabler of future growth.
In an exclusive interview with Gulf Business podcast Situation Today, Lula Mohanty, managing partner for IBM Consulting across the Middle East and Africa, shared her insights on the regional implications of the study and how IBM is helping organisations operationalise AI at scale.
“I’ve recently come into the region, and what excites me most is the scale of opportunity,” she says. “There is real momentum around AI here, and the UAE is treating it not just as an experiment, but as a major economic imperative.”
From vision to execution
Mohanty highlights a striking trend: one in three organisations in the UAE has appointed a Chief AI Officer—a significantly higher figure than global averages. According to her, this regional leadership is rooted in long-term national strategies such as UAE’s AI Strategy 2031, bold investments in digital infrastructure, and a government mindset that treats AI as a force multiplier.
“This leadership is rooted in UAE’s long-term vision,” she says. “It’s a country where AI is not just another prompt bar—it’s an economic driver, as His Excellency Omar Sultan Al Olama has described.”
His Excellency Omar Sultan Al Olama was appointed as the UAE Minister of State for Artificial Intelligence in 2017, becoming the world’s first minister in this field.
But while the UAE may be setting the pace, the real challenge lies in embedding AI within the fabric of an organisation.
“Creating AI models is no longer the hard part,” Mohanty says. “The challenge is in integrating those models into day-to-day business operations in a scalable, secure, and ethical way.”
This is where CAIOs are evolving from technologists into cultural leaders. According to the study, 40 per cent of UAE CAIOs are prioritising change management, higher than the regional average. These leaders are tasked with creating the conditions such as governance, security, and above all, mindset, for AI to thrive.
“At IBM, we ran a company-wide hackathon to embed AI thinking across the business. Over 178,000 IBMers participated. It was about building a culture where AI becomes business as usual, not an exception.”
Watch the full video interview here:
The importance of top-down AI strategy
The report also shows that 90 per cent of UAE CAIOs receive strong support from their CEOs, with 53 per cent reporting directly to the CEO or board. Mohanty believes this top-down commitment accelerates deployment and unifies organisational priorities.
“When leadership puts AI at the centre, everything else aligns—resource allocation, accountability, speed of decision-making. It becomes an enterprise-wide conversation, not a departmental initiative.”
IBM has mirrored this approach internally. Through its enterprise-wide AI strategy, IBM reportedly saved over $3.5bn in productivity using its watsonx platform—a blueprint now being adapted for clients in the region.
From pilots to measurable ROI
Despite the optimism, challenges remain. Around 76 per cent of UAE organisations are still in the pilot phase of AI deployment, compared to 60 per cent globally. Scaling beyond proof-of-concept requires more than vision—it requires infrastructure, trusted data, and cross-functional collaboration.
“POCs are everywhere, but the real challenge begins when you try to integrate AI into your business model,” Mohanty says. “A platform-first mindset is key.”
Financial autonomy also plays a role. The study reveals that 79 per cent of UAE CAIOs control their organisation’s AI budget, significantly higher than the global average.
“This ownership allows them to prioritise impactful programmes and track ROI. It’s about putting your money where your mouth is.”
On-the-ground impact: AI across sectors
IBM is actively partnering with public and private sector players to bring AI to life in the UAE. Examples include a strategic partnership with e&, announced at WEF 2025, to deploy an end-to-end AI governance solution using IBM’s watsonx.governance; a joint initiative with Dubai Future Foundation to mentor startups and build a high-impact AI hub; and A mobile app developed with the University of Sharjah, through the IBM Sustainability Accelerator, to help UAE farmers assess well water quality and optimise agricultural practices.
“The potential of AI in public administration, logistics, and healthcare is enormous,” says Mohanty. “We’re only just getting started.”
The changing face of AI leadership
The study also found that 69 per cent of UAE CAIOs come from data-related roles, and 48 per cent from operations. This signals a shift in the kind of leadership required.
“It’s not enough to know how AI works—you have to know where it will work,” she explains. “The most effective leaders now connect insights to impact. It’s not about assistants; it’s about orchestrated workflows.”
Internal promotions are also making a difference. 69 per cent of UAE CAIOs were promoted internally, which Mohanty believes drives cultural alignment.
“They hit the ground running, they know the processes, and they have the credibility to lead transformation. It also makes the CAIO role aspirational.”
Experimentation vs accountability
Despite challenges in defining perfect AI metrics, 74 per cent of UAE CAIOs are moving forward with AI programs. Mohanty says organisations must embrace a “progress over perfection” mindset.
“We didn’t wait for perfection when we built our AskHR platform. We set a modest target—10,000 hours saved—and ended up saving 12,000. Now we’re handling over 11.5 million interactions.”
She advises organisations to start with quick wins, define clear exit criteria for pilots, and adopt a phased approach to scale.
“AI can become outdated quickly. You have to move fast—but with discipline and governance in place.”
A global playbook from the UAE
For Mohanty, the lessons from the UAE are clear: build from the top, invest in platforms, integrate AI into every function, and cultivate a mindset shift.
“This is about building a scalable AI architecture with clear strategies, skills, and cultural readiness,” she said. “The UAE has shown that AI can become part of an organisation’s DNA—not just as a smart model, but as a driver of enterprise-wide transformation.”
