As global economies move toward digitalization and sustainability, the Middle East is positioning itself to benefit from the convergence of AI and climate resilience. According to a new report by PwC, if governments and businesses across the region fully embrace AI and take bold environmental action, the Middle East could add $232 billion to its GDP by 2035.

Under this best-case scenario, PwC estimates the region’s GDP could rise from $3.57 trillion today to $4.68 trillion by 2035. Countries like Saudi Arabia are already advancing on both fronts, investing in emerging technologies while making significant progress on sustainability goals.

Saudi Arabia ranked 15th globally in AI-related research output, according to the Global AI Competitiveness Index, with over 29,000 publications. “To stay ahead, businesses and governments must act with pace, purpose, and partnership — reimagining traditional models to unlock the competitive advantage the region is uniquely positioned to deliver,” said Stephen Anderson, chief strategy and technology officer at PwC Middle East.

In 2024, Saudi Arabia’s Public Investment Fund partnered with Google to launch Project Transcendence, a $100 billion initiative designed to scale local tech startups and drive global collaboration.

Even along a business-as-usual trajectory, the region’s GDP could increase by 41.8% by 2035. However, climate-related risks could reduce that growth to 27.9%, capping GDP at $4.57 trillion. “At stake is $232 billion — the gap between the region’s most optimistic and constrained economic futures,” PwC noted.

Saudi Arabia is also advancing climate goals through its Saudi Green Initiative, which aims to plant 10 billion trees and cut carbon emissions by 278 million tonnes yearly.

“A critical factor will be how effectively the region balances the cost and scalability of AI with the availability and affordability of clean energy,” said Yahya Anouti, partner at Strategy& and PwC Middle East sustainability platform leader. PwC urges governments, businesses, and academia to take bold, coordinated action to ensure a sustainable and tech-enabled economic future.