UAE organisations are showing signs of slowing AI maturity progress, even as spending on artificial intelligence climbs sharply, according to new findings from ServiceNow’s Enterprise AI Maturity Index.

The report reveals a growing gap between investment and execution. AI spending in the UAE rose 105% year-on-year. However, organisations recorded an AI maturity score of just 48 out of 100. That figure marks a 13-point improvement from last year. Still, it underscores the challenges companies face as they try to move beyond early experimentation.

Notably, the gap does not stem from a lack of funding. UAE organisations expect AI to account for nearly one-fifth of total IT budgets by 2027. Instead, the research points to a deeper issue: many companies are layering AI onto fragmented technology environments, disconnected data, and siloed workflows. As a result, progress in AI vision, strategy, and leadership has not translated into strong execution. Lower maturity in AI-enabled workflows and talent development continues to limit enterprise-wide scaling.

Meanwhile, agentic AI has become one of the region’s defining trends this year. Even so, the report suggests organisations are approaching autonomous AI deployment with caution. Companies are still working to build the governance, trust, and operational foundations needed to scale it safely. Currently, 57% of UAE organisations have implemented agentic AI. Yet only 7% have used it to build fully autonomous workflows. In most cases, AI is helping employees work more efficiently rather than transforming core business operations.

“The UAE remains one of the world’s most ambitious AI markets. The government’s long-term strategy and regulatory leadership have given organisations a genuine head start,” said Saif Mashat, VP – Middle East & Africa at ServiceNow. “While UAE organisations have built the financial and strategic commitment to AI, the ones pulling ahead are moving from AI pilots to AI orchestration, connecting legacy systems, data, governance, and AI agents in one control tower. That’s where enterprise-wide execution begins.”

Beyond the shift from augmentation to transformation, the report identifies three further challenges holding back UAE AI maturity. First, legacy technology remains a significant constraint. Only 14% of organisations have replaced outdated systems with integrated platforms. Consequently, AI is often deployed across fragmented workflows rather than a unified operational backbone.

Second, data readiness continues to be a major barrier. More than three-quarters of UAE executives, 77%, cite inadequate data accuracy, access, and management as a top obstacle to AI adoption. This finding reinforces the need to modernise data management and integration as companies scale AI across their organisations.

Third, governance remains underdeveloped. Only 16% of UAE organisations have implemented AI testing, auditing, and risk management processes. This gap highlights a significant opportunity to strengthen the foundations needed for AI at scale.

On a more positive note, the report shows that organisations with the highest AI maturity take a broader approach to transformation. Rather than simply investing in new technologies, they establish a shared AI strategy, modernise their data, deploy autonomous workflows, invest in continuous upskilling, and embed trust and transparency into governance. Consequently, these businesses achieve an average AI return on investment of 160%, a figure projected to rise to 194% within two years. They are also 5.6 times more productive, 2.7 times more successful at scaling AI, and 2.6 times more effective at managing risk.

“The organisations pulling ahead are no longer distinguished by how much they spend on AI, but by how effectively they operationalise it. This requires moving from point solutions to unified, orchestrated platforms,” Mashat added. “Strong governance, connected data, and orchestrated workflows are what translate investment into business outcomes. Together, these give organisations the confidence to scale AI, manage risk, and generate measurable returns. The UAE government has already created many of the conditions for AI leadership. The challenge for enterprises now is to bring that same discipline and consistency into their own organisations.”

Ultimately, the findings suggest that closing the execution gap, not increasing spend, will determine which UAE organisations lead the next phase of enterprise AI. As the region’s AI maturity journey continues, the shift from pilots to platforms will define who moves ahead.

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