The AI dividend: Could the Gulf turn AI wealth into guaranteed income?

Anxiety over what AI will do to the labor force shows no sign of receding, amid the promise of more across nearly every sector. 

As layoffs spread across industries and automation accelerates, a once-fringe idea is moving into the mainstream: how to compensate workers for the disruption AI may cause.

Even the architects of the AI boom are calling for a rethink. Nvidia CEO Jensen Huang says society needs “new social norms” for the AI era. JPMorgan CEO Jamie Dimon has warned that governments and businesses must support workers displaced by technology—or risk social unrest. OpenAI CEO Sam Altman has gone a step further, proposing a tech-funded “public wealth fund” that would give every citizen a stake in AI-driven prosperity.

Over the last few years, an idea that has gained popularity in Silicon Valley has been universal basic income (UBI), in which governments pay citizens a set amount of cash. Elon Musk remains a fan, Twitter co-founder Jack Dorsey and the Salesforce chief executive Marc Benioff have been vocal supporters, and Altman previously backed it, too. 

COULD UBI WORK HERE? 

Gulf Cooperation Council (GCC) countries are positioning themselves as global leaders in AI through large-scale investments in AI capabilities and partnerships with leading tech companies. But AI’s rise also comes with a reckoning. It could transform the labor market at scale; job losses could outpace job creation, and some industries might disappear.

If that happens, could the GCC embrace UBI—or a similar guaranteed income—as a new social safety net? 

“With GCC sovereign wealth assets estimated at roughly $4.8 trillion and direct state-backed exposure to AI infrastructure such as Humain, G42, MGX, and data centers, the public sector is already positioned to capture part of the upside from the AI economy,” says Jad Haddad, Partner and Global Head of Quotient – AI by Oliver Wyman.

This gives Gulf governments, adds Haddad, “more flexibility than countries that would need to fund income-support measures mainly by taxing private-sector AI profits.”

The GCC has more funding options than most regions, such as sovereign wealth returns, oil and gas revenue, VAT, corporate tax, and fees from profitable digital activities. However, Tony Hallside, CEO of STP Partners, says the real challenge is creating a model that is “predictable, fair, and financially stable”. “A permanent UBI would need a recurring revenue base.” 

TAXING AI-DRIVEN GAINS  

Around the world, one of the main ways to turn AI-driven productivity gains into public revenue is through corporate taxes. As AI makes companies more profitable, governments could collect some of these gains through current tax systems, automation-related taxes, or so-called “robot taxes.”

However, taxing AI profits is not simple. 

“Profits are mobile, tax competition remains real, and poorly designed levies can discourage investment or slow adoption,” Haddad says, underscoring the delicate balance policymakers must strike between raising public revenue and preserving innovation.

Haddad says that while the global AI debate has focused on taxing corporate profits, in the Gulf, the bigger question is who owns the AI economy. “That’s what makes the GCC different. Corporate taxes can help, but public ownership offers another funding channel.” 

With sovereign wealth funds and state-backed investors, such as PIF-owned Humain, Abu Dhabi’s G42, and MGX, deeply embedded in the region’s economy, Gulf governments may have a unique pathway to share AI-generated wealth. “It gives Gulf governments a potential route to AI-linked transfers that many other economies do not have,” he says.

But turning GCC funding mechanisms and AI wealth into a guaranteed income is far from straightforward.   

Asma Derja, founder of the Ethical AI Alliance, points out that while sovereign wealth funds, AI compute taxes, data licensing, and land value taxes are all potential funding mechanisms, they face two fundamental challenges. “First, they don’t fund themselves; someone with power has to choose to redirect that revenue. Second, a meaningful share of what counts as AI wealth right now is speculative valuation, not realized profit.”

In other words, the biggest obstacle may not be finding revenue—it may be finding real revenue.

“Funding UBI on productivity gains that haven’t materialized yet means funding it on a bet, not a balance sheet,” Derja says.

Throwing in a caution, Haddad says, while state-owned assets could provide an additional funding channel, these “should not be treated as a readily available cash pool. They carry investment mandates, liquidity constraints, and intergenerational obligations.”

CREATING AI WEALTH AND DISTRIBUTING IT

AI could create significant economic value by increasing automation and productivity. However, experts say the bigger challenge may be how to share this new wealth. 

The GCC is investing heavily in AI infrastructure, data centers, cloud services, and digital government. While creating wealth is an obvious goal, Hallside says the real challenge is ensuring these benefits reach people through better jobs, higher wages, greater savings, or direct income support.

“AI can expand the economic pie, but politics will decide how that pie is shared,”  Hallside adds.

Sharing wealth is a bigger challenge for institutions, says Haddad, and the ways to create AI wealth are developing faster than the ways to share it. “Even where redistribution tools already exist, such as unemployment insurance or sovereign dividends, they were not designed for structural disruption at this scale.”

However, he adds, the public-capture side of the distribution challenge may be “easier to address in the Gulf than in economies where the AI upside sits mostly with private firms.”

For Derja, the harder question isn’t how to fund UBI—it’s whether the wealth underpinning it is real, and who ultimately controls it.

“A meaningful share of what’s counted as AI wealth is paper valuation, not realized income, and generating even that draws on energy and water consumption tied to climate displacement with no legal protection,” she says. “Once real, realized wealth exists, it still concentrates with whoever controls the infrastructure. The distribution problem is the deeper one, but it can’t be answered honestly without questioning what’s actually being distributed.”

IS UBI THE INEVITABLE ANSWER?

Derja also warns that UBI is not a cure-all. “A flat payment ignores regional cost differences, and governments have used it to dismantle targeted welfare systems that served specific needs better,” she says.

Jason D. Schloetzer, Associate Professor at the McDonough School of Business, Dubai Executive MBA Program, points out that wealthy GCC countries could more easily test unconditional payments than others. However, he says, “easier to fund is not the same as being more likely to succeed.”

Schloetzer explains that although AI could increase productivity, these benefits have not yet been demonstrated at scale. He wonders if, once proven, these gains will be shared widely or remain limited to a few companies and industries. “The more durable investment is education and training, equipping workers to participate directly in AI-driven growth.”

Schloetzer adds, “A universal payment only redistributes what already exists, and if the AI gains are mainly concentrated in firms and sectors abroad, what exists could shrink.”

AI will intensify debates over UBI and its variations. However, Lisa Lyons, Partner and Transformation CoE Lead, IMEA at Mercer, says there needs to be caution about treating UBI as the inevitable answer to AI-driven disruption. “UBI is a downstream safety-net question. The upstream question is whether governments and employers can redesign work quickly enough so that employees remain active participants in the value AI creates, rather than being compensated after they have been excluded from it.”

Lyons adds that while the region may have more fiscal capacity to test new approaches to income security, skills development, and labor-market transition, the more realistic near-term opportunity is to “connect AI adoption with practical workforce systems, including reskilling pathways, learning-linked support, better internal mobility, and clearer routes into new forms of work.”

UNIVERSAL IN NAME, TARGETED IN PRACTICE

In the coming years, even if Gulf governments eventually embrace some form of UBI, experts say it probably would not start as a fully universal program.

In Gulf economies, social support is usually designed around clearly defined eligibility frameworks, including citizenship and residency status. That means a classical UBI that covers the entire resident population without conditions would be difficult to implement in practice.

According to Derja, existing welfare and subsidy programs across the region have largely been reserved for citizens, even though “these economies depend heavily on non-citizen labor at every income level.” Whether an AI-era income guarantee would follow the same pattern remains an open question. “If it did, that would be problematic, since a program excluding most of the workforce isn’t really universal,” she says.

Hallside agrees that demographics make a classic UBI difficult to implement. “A universal payment becomes much harder in economies with large expatriate workforces. In practice, any GCC version would likely begin as a citizen-focused or targeted income-support model rather than a fully universal system.”

Experts say targeted income support, wage subsidies, retraining, wage insurance, and assistance for workers moving into new industries may prove more effective—and more feasible—than an unconditional cash payment. 

As Haddad says, “The real policy question is not simply whether we will get UBI. It is: which combination of these tools can scale fast enough to match how quickly AI reshapes work?