What Will Power the Next Phase of AI Growth?

July 3, 2026

AI spending is rapidly increasing, with hyperscalers and generative AI revenue forecasts pointing to a major infrastructure-led growth cycle.
Dubai is accelerating public-private partnerships, government AI targets and tech investment to become a global AI hub.
The next phase of growth could hinge on adoption, workforce reskilling and AI literacy.

AI is no longer a technological breakthrough. It is increasingly being hardwired into economic strategies not only as a growth sector, but as a catalyst for industrial strength and national competitiveness.

From new data center infrastructure to a surge in generative and agentic AI applications, we are entering an era being defined by AI. What, then, is set to underpin growth?

Follow the money: The hyperscaler spending spree

Despite lingering bubble concerns, AI spending is forecast to rapidly accelerate globally, driving infrastructure and innovation.

BloombergNEF analysis estimates the capital expenditure of the 14 largest publicly owned data center operators will be around $750 billion in 2026, up from $450 billion last year. These public companies updated their capex guidance numbers in May 2026, saying they plan to spend $4 trillion from 2026-29.

Meanwhile, generative AI is already poised to be a $2.3 trillion market by 2032, according to Bloomberg Intelligence analysis.

Cities and countries investing early in key emerging technologies could reap dividends. Indeed, experts cite such forward-focused investment, alongside diversified innovation sectors, as key to the economic resilience recently shown by Dubai amid regional disruption.

Powered by partnerships

Public-private partnerships and innovation accelerators can help translate increased spending by tech companies into real-world innovation.

Dubai has set ambitious targets to increase AI adoption in both the public and private spheres. The emirate recently announced a two-year plan to ramp up AI use in the private sector, and it intends to transform 50% of government services, sectors and operations to autonomous agentic AI models by 2028.

Technology leaders based in Dubai, such as digital operator VEON Group, cite these forward-thinking government policies and close cooperation as key to their success.

In recent years, the UAE has seen a growing number of investments and agreements with leading global technology companies to advance AI infrastructure and capabilities.

Microsoft, with its regional headquarters in Dubai, plans to invest $15.2 billion in the UAE through 2029, primarily on AI and cloud infrastructure. The company has also secured export licenses to bring Nvidia GPUs to the UAE to support its Azure AI services.

Meanwhile, in early 2025, the Dubai Future Foundation and IBM announced a partnership aimed at making Dubai a global AI hub. It comes as the emirate aims to empower innovation with initiatives such as Sandbox Dubai.

Ensuring AI literacy

Investment, infrastructure and innovation might significantly boost capacity, but what will that mean for broader adoption?

Reskilling workforces for the AI age is seen as essential to increase adoption. The Dubai AI Academy aims to train 10,000 leaders in AI strategy and implementation by 2030.

Dubai is also focusing on next-generation talent, nurturing AI literacy at the early stages of development. MIT RAISE (Responsible AI for Social Empowerment and Education), an initiative of the Massachusetts Institute of Technology, seeks to empower responsible global AI literacy at all levels, working with a range of stakeholders to increase AI education. In November 2025, MIT RAISE hosted a two-day event in Dubai, bringing together global leaders in AI literacy to enhance access for students of all backgrounds.

Having honed an AI curriculum in recent years, Cynthia Breazeal, the Director of MIT RAISE, says it intends to roll out these learnings across all private schools in the emirate. Breazeal stresses that AI teachings aren’t isolated to areas such as computing, but also incorporate other core subjects, from math and English to arts and science.

For Breazeal, the ambition is to help create “a global movement around human-led, responsible AI literacy,” which is already gaining traction. She sees Dubai and the UAE emerging as leaders in advancing access to AI education.

Globally, AI adoption challenges remain, from upskilling workforces and ensuring equitable access to securing returns on investments as spending surges. Longer-term growth, however, appears all but assured, with those actively embracing this innovation set to reap significant advantages.