AI Adoption in UAE Businesses Drives Productivity but Third-Party Cyber Risks Loom Large A recent survey by QBE Middle East reveals that UAE businesses are rapidly embracing AI to boost productivity, efficiency, and innovation but many remain exposed to cyber threats through their supply chains. Conducted among 406 UAE organizations with 100 to 2,000 employees, the study highlights both the benefits and vulnerabilities of AI integration in the region. Key Findings: - AI Adoption & Business Impact: 82% of UAE businesses already use AI, with 17% exploring adoption. The top drivers include productivity (49%), operational efficiency (45%), customer experience (43%), innovation (41%), and decision-making (38%). Nearly all respondents (97%) expect AI to positively impact their business within the next two years. - Cybersecurity Challenges: Over the past year, 63% of UAE businesses experienced at least one cyber incident, with 73% of affected companies attributing an attack to a third-party supplier. Revenue loss was reported by 68% of impacted firms, while 31% faced business interruptions lasting at least a full day. - AI-Linked Threats: 21% of businesses reported AI-related cyber incidents, with phishing and deepfake attacks among the most common tactics. - Third-Party Risks: 67% of respondents expressed concerns about AI-related risks from suppliers, yet only 65% have cyber insurance, and 27% lack an incident response plan. - Investment in Security: 75% of UAE businesses plan to increase IT cybersecurity budgets, with 43% expecting raises above inflation. Expert Insights: Sarah Hamlat, Senior Cyber Underwriter at QBE Middle East, emphasized the need for robust governance beyond internal AI use, warning that supply chain vulnerabilities can quickly escalate into business risks. She stressed the importance of identity management, configuration audits, data encryption, and third-party evaluations to mitigate exposure. The findings underscore the UAE’s leadership in AI adoption while highlighting critical gaps in third-party risk management and cyber preparedness. As AI becomes more embedded in operations, businesses are urged to strengthen oversight across their entire ecosystem to ensure resilient growth.