Other BriefingsMiddle East Tech 2026: 5 Non-AI Trends Shaping Regional Business
As the Middle East enters 2026, tech investment is shifting beyond AI toward sovereign technologies such as biotechnology, quantum computing, nuclear energy, and zero-trust cybersecurity, all tightly linked to national industrial and security strategies. For foreign businesses, success increasingly depends on localization, regulatory fluency, and long-term partnerships with state-backed entities rather than transactional market entry models.
Biotechnology and life sciences from R&D ambition to commercial scaling
The Middle Eastern biotechnology market is rapidly maturing into a multi-billion-dollar industrial powerhouse, driven by national healthcare and climate agendas. In 2026, the industry is marking the shift toward manufacturing-scale deployment, as genomics, biofuels, and diagnostics projects move into operational phases. The UAE and Saudi Arabia lead regional biotechnology growth, while smaller markets such as Bahrain continue to commit substantial capital to expand testing and development capacity. By 2027, the genomics market in the Middle East and Africa is projected to reach US$1.2 billion, with Saudi Arabia and the UAE positioned to capture roughly 60 percent of the regional opportunity. At the same time, biofuel production is scaling as governments align investment strategies with 2030 and 2050 climate targets. Sovereign investors, including the UAE’s Mubadala and Saudi Aramco, are actively channeling capital into both domestic and overseas biotech ventures, driving rising demand for contract research services, diagnostics, and biomanufacturing capabilities. For international companies, the shift toward localization requirements means that purely transactional export models are fading. Success in 2026 requires establishing local labs, pursuing technology transfer agreements, and navigating intellectual property (IP) frameworks that are increasingly tied to national interests.
Quantum computing and early industrial applications and strategic pilots
Quantum computing has moved past the stage of academic curiosity. In 2026, the Middle East is seeing the first wave of applied industrial pilots, particularly within the energy and material science sectors. Saudi Arabia’s Aramco has partnered with the quantum computing firm Pasqal to launch the Kingdom’s first quantum computer, specifically designed for industrial applications like predictive maintenance and energy distribution management. Similarly, the UAE’s Technology Innovation Institute (TII) is collaborating with Quantinuum to develop quantum algorithms that could revolutionize local logistics and materials discovery. These projects serve a dual purpose:
- Industrial Efficiency: Managing complex energy grids and accelerating the discovery of new chemical compounds.
- Strategic Security: Quantum computing is reshaping cybersecurity by undermining classical encryption and accelerating the need for quantum-resistant protocols.
Geopatriation and sovereign technology stacks for data, cloud, and hardware localization
Geopatriation refers to the relocation of digital workloads and data onto sovereign-controlled clouds and local hardware and stands out as a major structural shift in 2026. Driven by national security concerns and the massive data requirements of AI, Middle Eastern states are reducing their reliance on cross-border digital architectures. This trend has extended beyond data residency to include the localization of critical hardware capabilities. In semiconductors, the Abu Dhabi-based startup Mastiska has raised US$10 million in seed funding with backing from sovereign wealth funds to develop domestic chip design capacity. In parallel, the UAE’s Mohammed Bin Rashid Space Centre has partnered with European providers to advance sovereign satellite programs, reinforcing local control over high-value aerospace technologies. For global cloud and hardware providers, compliance is no longer contractual but architectural, requiring in-country infrastructure by design. This is creating a surge in demand for localized infrastructure, managed services, and compliance-ready solutions that respect regional data residency laws.Nuclear energy and small modular reactors (SMRs) powering digital and industrial growth
Ongoing digitalization, including large-scale investments in hyperscale data centers, is placing sustained pressure on regional power systems. By 2035, nuclear capacity in the Middle East is projected to triple. While traditional large-scale reactors remain part of long-term energy planning, small modular reactors (SMRs) are emerging in 2026 as a more flexible and scalable alternative. SMRs reduce construction timelines and costs by relying on off-site manufacturing and on-site assembly. Their relevance is increasing as large digital infrastructure projects, including hyperscale data centers, drive sustained demand for reliable baseload power. For suppliers, this shift is opening significant opportunities across engineering services, reactor technologies, and nuclear safety and control systems. However, the procurement cycles for nuclear projects remain long and highly regulated. Companies entering this space must align their offerings with national energy and climate agendas to secure the necessary state-backed partnerships.Zero-trust cybersecurity from IT defense to critical infrastructure protection
As the region digitizes its factories, grids, and offices, the "attack surface" for cybercriminals has expanded exponentially. Data breaches exceeding US$100,000 have already hit 15 percent of regional organizations. In response, the region is moving away from perimeter-based security models toward zero-trust architectures, under which no user, device, or system receives implicit trust. Security priorities now extend beyond office IT systems to cover operational technology in critical infrastructure, including oil refineries and water treatment facilities. At the same time, demand is rising for solutions that enable continuous authentication, real-time verification, and behavioral monitoring across both IT and industrial systems. The challenge for 2026 lies in integrating these modern security frameworks with legacy systems. Industrial operators increasingly seek cybersecurity firms capable of performing complex audits, ensure cross-border data governance, and manage the integration of zero-trust architectures within existing industrial environments.Strategic takeaways for foreign businesses
The recurring themes for 2026 are sovereignty, localization, and state involvement. The Middle East is no longer simply a destination for finished products; it increasingly expects foreign participants to integrate into local value chains and contribute to long-term capability building. Sustained partnerships with state-backed entities have replaced transactional models as the primary driver of success in non-AI sectors. Within this context, regulatory fluency has become a prerequisite rather than a differentiator. Companies must be prepared to navigate local data residency rules, intellectual property frameworks, and public procurement requirements from the outset. A physical and operational presence in the region is also increasingly mandatory. In capital-intensive sectors such as small modular reactors and biotechnology, foreign firms are expected to establish local footprints, develop domestic talent, and align their activities with national technology and industrial strategies. The Middle East’s non-AI tech landscape in 2026 offers substantial opportunity, but capturing it requires a sophisticated approach that balances advanced technical capability with a clear commitment to national development objectives.This article first appeared on Middle East Briefing, our sister platform.
