How Highly Regulated Industries Can Confidently Embrace An AI-Native Future

The UAE holds a strong position globally as an AI innovator. The world's first country to form an AI ministry has cemented its forerunner credentials by nurturing researchers and encouraging early adopters.

These actions are bearing fruit. The overall AI market in the UAE is projected to reach $1.17 billion in 2025 and grow at a CAGR of 26.26% to reach $4.74 billion by 2031. Projections for sub-strands such as generative AI and agentic AI are similarly upbeat, signaling the ambitions of organizations across the country to play starring roles in its AI future. But for this potential future to be realized, we must unlock AI's full potential. And to do that we must enable the widespread availability of infrastructure with massive compute power, seamless interoperability, and resilience on a national scale.

The UAE's AI ambitions are closer to reality than ever, but the path forward is complex.

The tools of innovation are widely available, yet organizations operating in highly regulated industries must navigate stringent requirements around how data is stored, transported, and used. To accelerate AI adoption while maintaining the highest standards of privacy and security, enterprises need access to sovereign-grade cloud platforms purpose-built for regulated environments. These platforms must deliver autonomy, scalability, and flexibility, giving government entities, banks, utilities, telcos, and other critical sectors full control of their data while ensuring they are never limited in their ability to grow or innovate.

Healthcare organizations lose trust if patient records are compromised. Financial organizations suffer high volumes of customer churn if account-holder information is leaked. Critical infrastructure providers, meanwhile, could see service disruptions and sector-wide instability if security is breached. Any one of these scenarios can have severe knock-on effects that curb economic growth, putting the AI dream at risk.

Every AI project carries inherent risk, which is why regulators require workloads to align with best-practice frameworks. Without strong governance, rapid technology adoption can quickly spiral out of control. As a result, organizations are prioritizing data control while pursuing the transformative potential of AI. To innovate confidently, they need assurance that compliance is embedded into every stage of their AI initiatives, from design to deployment, without slowing progress.

What we're seeing, though, is that UAE organizations have not been sitting still on the control-innovation trade-off challenge. In recent years, the country has invested heavily in hyperscale compute, advanced networking, and sovereign-grade infrastructure to ensure that innovation is not compromised by security or regulatory constraints. These investments are laying the groundwork for an AI economy that is globally competitive, resilient, and trusted.

Core42's Sovereign Public Cloud, already trusted by more than 50 customers across government and regulated sectors, leverages Microsoft Azure and is enhanced by the sovereign controls platform Insight. Designed specifically for the UAE's government and regulated sectors, the platform delivers the scalability and interoperability of one of the world's most secure and widely available global public clouds while embedding compliance controls and localized governance, giving enterprises the confidence to deploy AI workloads at scale.

In addition, Core42's Signature Private Cloud offering, which is currently live in Customer Preview, enables full digital sovereignty for sectors managing secret and top-secret data. This includes industries like defense, national security, public safety, financial services, healthcare, and critical infrastructure.

With data stored within national borders in G42-owned facilities, managed by security-cleared local staff, and built on open-source and Core42-owned IP, this offering together with the Sovereign Public Cloud enables a comprehensive sovereign cloud ecosystem tailored to the UAE's regulatory landscape and growth ambitions, giving public and private entities choice, flexibility, and control over every stage of their digital transformation journey. It's an approach that not only supports the UAE's ambition to lead in AI, but also creates a model for balancing innovation with sovereignty - one that other nations may look to replicate.

AI waits for nobody. It is already evolving at a pace that most organizations cannot independently match while meeting their regulatory obligations. But by joining with the right sovereign-cloud partner, innovators can keep on innovating, even accelerating the value journey from ideation to design to implementation. Any competitive enterprise will recognize the gift in being able to reach the market quickly while remaining aligned with global best practices. Such is the promise of a sovereign cloud.

The We The UAE Vision 2031 deadline is approaching. I believe the UAE will surprise even itself when, on New Year's Eve 2029, we take stock of how far we have come. Perhaps our AI journey will look different on the other side of that milestone. Sovereign public clouds are built for those uncertainties, allowing their tenants to continue playing major roles in their economies regardless of what the future holds.

The writer is chief technology officer, Core42.

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