INSEAD's Associate Professor Vikas Aggarwal on How Ecosystem Partnerships Shape MENA's Future in AI Vikas Aggarwal, Associate Professor of Entrepreneurship and Academic Director of INSEAD's Global Private Equity Initiative (GPEI), on the need to build a collaborative AI ecosystem in the MENA region.

"The opportunity the UAE and Saudi Arabia have is that they now can set the terms of the global conversation on artificial intelligence (AI)," says Vikas Aggarwal, Associate Professor of Entrepreneurship and Academic Director of INSEAD's Global Private Equity Initiative (GPEI), on the sidelines of the AI Forum: Middle East organized by INSEAD in partnership with French Tech.

Prof. Aggarwal is rightly highlighting that the UAE is developing one of the most cohesive and advanced AI ecosystems in the MENA region, and perhaps around the world as well.

Over the last few years, the UAE has introduced several national AI initiatives, including appointing the world's first Minister of State for AI in 2017 and launching the National Strategy for Artificial Intelligence 2031. Recently, the country was ranked among the top 10 countries with the most AI companies per million people, according to the Global AI Competitiveness Index, a collaborative effort between the International Finance Forum and Deep Knowledge Group that analyzed over 55,000 AI companies worldwide. Plus, the country's Ministry of Education has just announced the integration of AI as an official subject in the public-school curriculum for kindergarten to Grade 12, starting from the 2025-2026 academic year.

"In the Middle East, we now have a very unique confluence of government vision, public investment, and an ecosystem of AI players. For AI entrepreneurs to survive, you need this broader ecosystem not only locally, but also internationally," says Prof. Aggarwal. "Corporate partnerships, like what G42 has with Microsoft, are very good examples of how developing a broader partnership ecosystem can create a framework within which entrepreneurs can flourish."

"I think the UAE is in a very unique position because, in contrast with many parts of the world where there is less clarity on regulatory frameworks, here you have a very favorable structure for innovation. That is why I think the UAE's AI entrepreneurs will play a central role in driving the adoption of AI worldwide. When it comes to AI, there is not going to be one player, but an ecosystem of players."

Prof. Aggarwal is no stranger to witnessing (and taking part in) the emergence of startup ecosystems. Following his Silicon Valley startup experience, where he worked with the founding team of Military.com to grow the company through multiple rounds of venture financing, he also worked as an independent consultant to a range of tech firms. Today, he focuses on venture capital-backed startups, as well as larger firms experiencing significant environmental change. "A lot of the businesses we saw in the Middle East from 2010/2012 until this current AI boom were very much local/regional solutions to problems that exist globally, and for which other firms created local solutions [in other parts of the world]; but the big question for me now is to what degree the local and regional AI firms of today will have a global impact." he says.

Prof. Aggarwal led a panel entitled "AI Startups in MENA: Fueling Innovation, Competing Globally", held as part of INSEAD Global AI Forum Series. The session explored the opportunities and challenges that AI startups face across the region, with a special focus on the UAE and Saudi Arabia as rising global hubs for innovation. His first piece of advice for AI startups is to be open to partnerships. "They need to recognize that they are operating in an environment where ecosystem relationships are key. Following government regulations and frameworks, finding corporate partners, and thoughtfully structuring relationships, are all important and very interdependent imperatives that AI entrepreneurs cannot pursue in isolation."

A panel entitled "AI Startups in MENA: Fueling Innovation, Competing Globally", held as part of INSEAD Global AI Forum Series in Dubai. Source: INSEAD

The INSEAD event in Dubai also coincided with the launch of INSEAD's Human and Machine Intelligence Institute (HUMII), whose mission is to understand and shape the evolving partnership between humans and machines in business and leadership. Prof. Aggarwal expands his support to ecosystem partnerships by pointing to the need for academic research and partnerships, via initiatives such as HUMII, to play an crucial role in the AI ecosystem. "The institute is tasked with bringing together participants from across our portfolio of programs to better understand how we can put humans at the center of future developments," he explains. "Academic institutions are a great opportunity to serve as a hub to bring people together. Given the importance of ecosystems, particularly in AI, entrepreneurs should focus on developing closer relationships with universities because they can play a catalyzing role in driving the success of their entrepreneurial ventures."

The UAE recently expanded its Golden Visa regime, a long-term residence for foreign talents, to tech and AI specialists and founders, inviting them to live and build their solutions in the UAE. "One of the great things is that the UAE and Saudi Arabia have the ability to attract the best talent, from Europe to Southeast Asia to other parts of the world. That was happening even before the AI boom, and I think that was quite necessary for this AI boom in MENA to really take off," Prof. Aggarwal says.

Investors have been increasingly supporting the AI vision of regional governments, such as Saudi Arabia aiming to derive about 12% of its GDP from the AI industry by 2030, or the UAE aiming to increase digital economy-related contributions to its GDP to over 20% by 2031. To AI startups looking to raise funds, Prof. Aggarwal advises finding a way to revenue and scalability "very quickly." He adds, "Startups need to figure out how they can quickly get to the point where the business model is clear and where there is a clear path to scaling. I don't think there is a shortage of capital; rather there is a need for entrepreneurs who bring together their vision with a scalable business model and execution capability, as well as the ability and willingness to work in the context of partnerships. If you as an entrepreneur have that magic combination, the capital will come."

"The track to revenue is critical, particularly with AI. Who are you partnering with? What is the vision? I think one of the things that VCs always want to understand is whether you are someone who is very tied to their vision or somebody who can pivot and move and is willing to say, 'ok, let's evolve.' As an entrepreneur, you have to be open to the process of learning, and that's what VCs are looking for. It's not just about the idea, but about the way in which you approach feedback from the market," Prof. Aggarwal concludes.