Mideast companies reconsider the high cost of AI leadership

The global race to develop powerful AI models is increasingly dominated by the U.S. and China, leaving ambitious countries like the UAE struggling to keep up.

The UAE’s flagship model, Falcon, which once promised to dominate, has fallen behind in rankings and user adoption, with the system now lagging far behind global leaders by performance, Bloomberg reports.

G42, a major backer of another GenAI system called Jais, has shifted focus to customizing models from companies like OpenAI instead of developing its own.

This reflects a broader trend across the Middle East and Europe, where several high-profile AI ventures, including Germany’s Aleph Alpha and Britain’s Stability AI, have scaled back or collapsed.

Across the Middle East and beyond, companies are reassessing whether it’s worth the massive cost of developing cutting-edge AI models from scratch.

G42’s Jais still has the potential to become a competitive “frontier model,” according to Kiril Evtimov, who leads the company’s cloud unit, Core42.

But even he admits the economics may not add up, “Is that the right business strategy for us to capture the market? Probably the answer is no.”