More Rebrands Than Newbies: Unpacking MENA AI Growth in 2025

In 2025, 80% of MENA AI startups are based in the UAE and Saudi Arabia, marking a decisive geographic concentration of artificial intelligence ventures in the region. But beneath this headline lies a deeper shift: most of the year’s growth in AI startups came not from new companies, but from older tech firms rebranding themselves as AI-driven. 

260 of 332 MENA AI Startups Now Based in UAE and Saudi

Out of the 332 active AI-focused startups recorded in 2025, 150 are headquartered in the UAE and 110 in Saudi Arabia. In contrast, the rest of MENA—comprising Egypt, Jordan, Tunisia, Lebanon, Kuwait, Bahrain, Qatar, and Oman—collectively hosts only about 70 ventures, or 21% of the total.

AI Startups Rise 30%, But Growth Fueled by Rebrands

The number of active MENA AI startups increased from 256 in 2024 to 332 in 2025, representing a 30% year-over-year jump. However, analysis from the Clear World June 2025 Report reveals that this jump was driven more by narrative repositioning than new company creation.

Between April 2024 and April 2025, 43 existing ventures rebranded as AI startups, while only 33 genuinely new AI startups were founded in the region.

This marks a shift in how startups are responding to evolving funding signals and policy priorities. Many mid-stage companies—particularly in SaaS, automation, and analytics—have recalibrated their identity, integrating AI elements or repositioning product language to align with investor demand.

Rebrands Become Market Signal, Not Just a Label

As generative AI gains visibility, rebranding has become a growth signal across the ecosystem. But the ease of integrating AI does not guarantee product depth. Many of the newly labeled ventures leverage AI tactically—rather than embedding it structurally into their operations.

This influx of "AI-converted" ventures makes market tracking more complex. Investors and ecosystem enablers are now weighing not just product capability but the authenticity and depth of AI integration. The distinction between AI-as-core versus AI-as-accessory is becoming a new due diligence imperative.

Investors Prioritize Defensibility Over Buzzwords

Mohidul Alam, analyst at VentureSouq stated, "Many have witnessed this cycle before—dot-com, Web3, crypto—and are now observing carefully. Capital is concentrating in AI companies with true defensibility: proprietary data, infrastructure plays, and AI-native workflows. For the rest, a name change alone won’t move the needle."

For investors, the signal is clear: a name change may earn attention, but not capital. As MENA’s AI narrative matures, emphasis is shifting toward companies with differentiated capabilities and tangible use cases.

Outside the Gulf, other MENA ecosystems may find opportunity in vertical-specific innovation, localized data models, and sector gaps yet to be addressed by Gulf-based players.

In a region long defined by outsized ambition, AI’s next chapter will be written by those building, not just rebranding.