Outlier Ventures CEO Discusses Pioneering Role of Middle East and North Africa in Web3 Adoption

The Middle East and North Africa (MENA) region is quickly becoming a notable force in the push for global crypto adoption. With growing participation from institutions and enterprises and supportive regulations for Web3 technology, MENA is set to expand its impact.

BeInCrypto interviewed Stephan Apel, CEO of Outlier Ventures, to explore the characteristics of these tech-driven economies and their anticipated innovations.

Web3 Adoption and Market Growth

MENA has emerged as a significant center for Web3 development, facilitated by a combination of demographic, technological, and cultural factors. The region’s entrepreneurial spirit has also fostered an environment conducive to the adoption of decentralized technologies. 

“‬The‬‭ MENA‬‭ market‬‭ has‬‭ set‬‭ a‬‭ standard‬‭ for‬‭ adopting‬‭ next-gen‬‭ technologies‬‭ and‬‭ using‬‭ them‬‭ to‬‭ boost‬‭ their‬‭ economic‬‭ transformation.‬‭ This is especially true for Web3‬‭ technologies—‬‭ the‬‭ region recognised their potential early‬‭ on,‬‭ offering‬‭ the‬‭ resources‬‭ needed‬‭ for‬‭ these‬‭ projects‬‭ to‬‭ scale‬‭ and‬‭ thrive‬‭ on‬‭ both‬‭ regional‬‭ and global levels,” Apel told BeInCrypto.

Consequently, the region is witnessing an increase in startups, investors, and developers exploring Web3 and its diverse applications.

A 2024 Chainalysis report revealed that MENA was the seventh biggest crypto market worldwide. From July 2023 to June 2024, the region saw $338.7 billion in online crypto transactions, representing 7.5% of all crypto transactions globally.

Share of all cryptocurrency transaction value by region. Source: Chainalysis.

While the MENA region’s overall cryptocurrency market size may be smaller than others, it boasts significant adoption within its borders. 

Notably, Turkey and Morocco ranked among the top 30 countries globally in crypto adoption. Turkey secured the 11th spot, while Morocco ranked 27th. These nations alone accounted for $137 billion and $12.7 billion in received cryptocurrency value, respectively. 

Furthermore, the MENA region’s crypto activity is predominantly driven by institutional and professional players, as a substantial 93% of all value transferred involves transactions exceeding $10,000.

Meanwhile, Gulf Corporation Council (GCC) members have distinguished themselves through their ambitious technological initiatives.

MENA’s Strategic Shift Towards AI

The onset of artificial intelligence (AI) has prompted governments and businesses within the Middle East to acknowledge the global trend towards related advanced technologies. Countries like Qatar, Saudi Arabia, and the United Arab Emirates (UAE) are considering their strategic position concerning this technological transformation.

According to a report by PricewaterhouseCoopers (PwC), AI could contribute up to $15.7 trillion to the global economy in 2030. The consulting firm predicts that the Middle East will bring 2% of the total global benefits, equal to $320 billion.

MENA’s pioneering role in AI development. Source: PwC.

“Unsurprisingly,‬‭ MENA‬‭ is‬‭ now‬‭ a‬‭ major‬‭ global‬‭ hub‬‭ for‬‭ technological‬‭ and‬‭ economic‬‭ activity‬‭ in‬‭ emerging‬‭ sectors‬‭ like‬‭ Web3‬‭ and‬‭ AI.‬‭ Abu‬‭ Dhabi,‬‭ Dubai,‬‭ Qatar,‬‭ and‬‭ Saudi‬‭ Arabia‬‭ are‬‭ especially‬‭ notable‬‭ for‬‭ the‬‭ scale‬‭ of‬‭ their‬‭ ambitions‬‭ and‬‭ the‬‭ attractiveness‬‭ of‬‭ more‬‭ prominent‬‭ international‬‭ players.‬‭ The‬‭ proximity‬‭ of‬‭ the‬‭ network‬‭ effect‬‭ of‬‭ these‬‭ rapidly‬‭ developing‬‭ tech-focused‬‭ economies‬‭ should‬‭ not‬‭ be‬‭ underestimated,‬‭ along‬‭ with‬‭ the‬‭ region’s‬‭ natural location as a global geographic hub,” Apel said. 

The PwC report also indicates that Saudi Arabia will see the largest absolute gains from AI by 2030, with an estimated US$135.2 billion added to its economy, or 12.4% of GDP. In terms of GDP percentage, however, the UAE is expected to see the greatest impact, approaching 14% of its 2030 GDP. Meanwhile, for GCC states Bahrain, Kuwait, Oman, and Qatar, AI is expected to contribute 8.2% of their GDP.

Given the region’s latest initiatives and investments in AI innovation, these numbers come as no surprise.

Saudi Arabia’s AI Development Initiatives

In 2016, the Saudi Arabian government launched Vision 2030, a program to promote economic, social, and cultural diversification. Integral to this vision is a strategic shift towards artificial intelligence and data-driven innovation, a key component of the nation’s economic diversification efforts. 

Saudi Arabia is making notable advancements in AI. The country aims to reduce its reliance on oil by developing advanced technology sectors through targeted investments, infrastructure development, and workforce training.

“Fueled‬‭ by‬‭ its‬‭ Vision‬‭ 2030‬‭ initiative,‬‭ Saudi‬‭ Arabia‬‭ has‬‭ already‬‭ created‬‭ a‬‭ thriving‬‭ startup‬‭ ecosystem,‬‭ dedicated‬‭ significant‬‭ investment‬‭ in‬‭ emerging‬‭ technologies,and designed policies to attract global talent and entrepreneurship,” Apel told BeInCrypto.

The Saudi Data and Artificial Intelligence Authority (SDAIA) spearheads Saudi Arabia’s push into artificial intelligence, shaping and implementing the country’s national data and AI strategy. The National Data Bank is a cornerstone of their efforts. It is designed as a central hub for data access and analysis, facilitating AI applications across public and private sectors.

Last November, Saudi Arabia also unveiled Project Transcendence. The $100 billion investment initiative focuses on accelerating the integration of AI and advanced technologies.

Similar to its neighbor, the UAE has actively pursued AI adoption.

UAE’s AI Strategy and Investments

In 2017, the UAE launched its National Strategy for Artificial Intelligence, which aims to make the country a global leader in the field by 2031. The UAE AI and Blockchain Council oversees this strategy, which impacts sectors like education, energy, and tourism.

“This‬‭ financial‬ and‬‭ regulatory‬‭ support‬‭ for‬‭ AI‬‭ development‬‭ will‬‭ unlock‬‭ new‬‭ revenue‬‭ streams‬‭ and‬‭ elevate‬‭ the‬‭ region’s‬‭ international competitiveness,” Apel explained. 

The UAE is already reaping the benefits of its AI initiatives. In April, Microsoft announced a $1.5 billion investment in G42, an Abu Dhabi-based technology holding company. G42 is known for its data centers and the development of Jais, a leading Arabic-language AI model.

In September, G42 and Nvidia partnered to create AI-driven solutions for improved weather forecasting. The collaboration aims to advance climate-related technologies by using Nvidia’s Earth-2 platform, which enables AI-augmented climate and weather simulations.

Three months later, Abu Dhabi-based global technological ecosystem Hub71 partnered with Google to boost startup growth in the UAE. This collaboration will bring Google’s “Google for Startups” program to Abu Dhabi, including a dedicated accelerator for Hub71 startups in 2025. 

“‬The‬‭ Middle‬‭ East‬‭ is‬‭ well-positioned‬‭ to‬‭ lead‬‭ in‬‭ transformative‬‭ technologies.‬‭ MENA’s‬‭ robust‬‭ support‬‭ for‬‭ entrepreneurship‬‭ and‬‭ rapid‬‭ AI‬‭ adoption‬‭ drive‬‭ groundbreaking‬‭ change‬‭ across‬‭ industries.‬‭ I‬‭ see‬‭ the‬‭ Middle‬‭ East‬‭ becoming‬‭ a‬‭ home‬‭ for‬‭ startups.‬‭ There‬‭ are‬‭ pre-established‬‭ policies,‬‭ resources,‬‭ and‬‭ investment‬‭ opportunities for businesses to scale from the ground up,” Apel added.

He also drew attention to the planned convergence of AI and Web3 technologies in these prominent regions.

Convergence of AI, Web3, and IoT

Integrating the Internet of Things (IoT), blockchain, and AI technologies is gaining traction among businesses in the Middle East. By combining these technologies, organizations can access new avenues for growth, increase efficiency, and create novel user experiences.

“These‬‭ technologies‬‭ complement‬‭ one‬‭ another,‬‭ enabling‬‭ automation,‬‭ transparency,‬‭ and‬‭ efficiency‬‭ at‬‭ scale.‬‭ Distributed‬‭ ledger‬‭ technology,‬‭ combined‬‭ with‬‭ AI,‬‭ unlocks‬‭ new‬‭ possibilities‬‭ for‬‭ decentralized‬‭ systems,‬‭ while‬‭ IoT-driven‬‭ data‬‭ networks‬‭ feed advanced analytics and machine learning models,” Apel told BeInCrypto.

In 2018, the Dubai Airport Freezone Authority launched Dubai Blink, a platform that integrates AI, blockchain, and virtual licenses to facilitate global trade. This system enhances supply chain innovation through ‘smart commerce’ by expediting trade with a unified online platform. Furthermore, it addressed the cumbersome process of supplier identification by using AI algorithms to streamline and accelerate the validation process.

“The‬‭ region‬‭ is‬‭ already‬‭ ahead‬‭ of‬‭ many‬‭ global‬‭ trends.‬‭ Strategic‬‭ investments‬‭ in‬‭ smart‬‭ cities,‬‭ renewable‬‭ energy‬‭ infrastructure,‬‭ and‬‭ advanced‬‭ manufacturing‬‭ highlight‬‭ the‬‭ region’s‬‭ ambition‬‭ to‬‭ construct‬‭ sustainable,‬‭ technology-driven‬‭ economies.‬‭ These‬‭ initiatives‬‭ create‬‭ the‬‭ perfect‬‭ ecosystem‬‭ for‬‭ scaling‬‭ and‬‭ building solutions to regional and global challenges,” Apel concluded. ‬

Ultimately, MENA’s proactive approach to technological advancement, coupled with its strategic focus on Web3 and AI, signals a future where the region will be a pivotal architect in shaping the digital economy.