PwC: AI, cloud and next-generation networks redefine the Middle East’s TMT future

Artificial intelligence (AI), cloud computing and next-generation connectivity are rapidly transforming the Middle East’s telecoms, media and technology (TMT) landscape, positioning the region as one of the world’s fastest-emerging digital-first economies, according to a study by PwC.

The research highlights how the convergence of AI, 5G, cloud, gaming and quantum technologies is redefining not only infrastructure investment, but also creativity, competitiveness and national digital sovereignty. Rather than acting solely as a consumer of global technology, the Middle East is increasingly shaping its own digital future through large-scale, state-backed initiatives and partnerships with hyperscalers and technology providers.

At the centre of this shift is AI. PwC notes that the technology is driving surging demand for computing power, advanced semiconductors and datacentres, accelerating a move away from investment in standalone models towards the infrastructure that enables AI at scale. Sovereign cloud platforms and hyperscale datacentres are emerging as the backbone of this transformation, supporting national AI strategies, data residency requirements and trusted digital ecosystems.

Cloud adoption is accelerating rapidly. PwC forecasts that by 2025, around 85% of digital infrastructure in the region will be cloud-based, reflecting the convergence of AI, cloud and 5G. This transition is creating demand for hybrid and sovereign cloud environments that balance scalability with security and regulatory compliance. Cloud security, however, remains a major concern, with organisations identifying it as one of the cyber risks they feel least prepared to address.

The Middle East is also fast becoming a global AI compute powerhouse. PwC estimates that regional datacentre capacity could reach between 5GW and 6GW by 2030, driven by hyperscaler expansion, sovereign cloud programmes and national AI ambitions. Saudi Arabia, the UAE and Qatar are leading this buildout through multi-hundred-megawatt projects involving global technology partners. 

Telecoms operators are playing a central role in this evolution. PwC highlights how telcos are moving beyond connectivity to become owners and operators of digital infrastructure, investing heavily in datacentres, fibre networks and AI-enabled platforms. By embedding AI into 5G networks, telcos are optimising performance, reducing costs and unlocking new revenue streams across smart cities, Industry 4.0, immersive consumer services and enterprise digitisation.

Quantum computing is emerging as another strategic frontier. PwC points to growing investment across the Gulf, including long-term national partnerships and the creation of dedicated quantum hubs. While the technology promises breakthroughs in areas such as energy, finance, defence and cyber security, the study warns that preparedness remains low. Despite quantum being recognised as a major future cyber threat, PwC found that many organisations have yet to implement quantum-resistant security measures.

In media and entertainment, AI is reshaping the entire value chain. According to PwC, broadcasters and streaming platforms across the Middle East are using AI to personalise content, automate workflows, combat piracy and expand Arabic-language content to global audiences. This shift is enabling regional platforms to compete more effectively with international players, while reinforcing cultural identity and local intellectual property.

Gaming has become a flagship example of this strategy. PwC highlights Saudi Arabia’s ambition to turn gaming and esports into a major economic pillar, backed by sovereign investment, infrastructure development and talent programmes. It aims to create tens of thousands of jobs and add billions of dollars to GDP by 2030, signalling how digital creativity is being woven into broader diversification agendas.

PwC concludes that the Middle East’s TMT transformation is being driven by deliberate choices, sovereign cloud, AI-native infrastructure, Arabic-first content and next-generation networks. If these initiatives scale successfully, the region will move beyond rapid adoption to become a global reference point for how technology, culture and economic strategy converge in the digital age.