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Why Dubai’s AI and smart city strategy is attracting Southeast Asian startups

The development of smarter algorithms and higher processing power to drive deeper artificial intelligence (AI) adoption must be accompanied by efforts to capture, analyse, and optimise data more efficiently. Cities that position themselves as testbeds for innovation are experimenting with ways to combine infrastructure, policy, and talent to make this possible.

Dubai is one example. Its pragmatic approach to business has attracted interest from Singapore for years, with Singapore ranking among the top 10 sources of foreign direct investment (FDI) into the city. According to the Dubai FDI Results & Rankings – Highlights Report 2024, 22 per cent of all project announcements from Singapore fall in the software and IT services segment.

This dovetails with the trajectory of Southeast Asia’s tech start-up ecosystem, which reached a combined market valuation of US$454 billion in H1 2024, according to the Destination Southeast Asia Report 2024 published by Founders Forum Group in partnership with EDB Singapore.

The report underscores the growing potential for Southeast Asian enterprises to expand their footprint globally, including into Middle Eastern markets. Dubai’s role as a growing technology hub highlights one pathway for such collaborations, particularly in AI, smart cities, and fintech.

Shared ambition and vision

For mature and late-stage Southeast Asian startups exploring international expansion, Dubai offers a case study in how supportive ecosystems are structured.

The city combines legislation designed to streamline business operations with infrastructure and amenities that support socioeconomic development. Its geographic position at the crossroads of Europe, Asia, and Africa strengthens this appeal by connecting global experts who are focused on improving data curation, accessibility, and application.

Policy instruments such as long-term visas, including Golden and Remote Working Visas, illustrate how talent mobility is being addressed, while strategies such as the Dubai Economic Agenda ‘D33’ and UAE Digital Economy Strategy frame the city’s broader innovation goals. Together, these measures highlight the role of policy frameworks in creating environments conducive to research, development, and international collaboration.

Also Read: B Capital General Partner Yanda Erlich on the red flags he notices when investing in AI space

An evolving ecosystem

Over the past 25 years, Dubai Internet City has become a focal point for this shift. It has served as a base for global firms as well as start-ups and scale-ups, and today hosts more than 4,000 companies and 31,000 professionals, along with innovation and R&D centres. Singaporean companies such as Wego, an online travel marketplace, are among those that have established a presence there.

The district’s initiatives — including mentorship programmes, co-working spaces, incubators like in5 Tech, and flexible platforms such as D/Quarters — offer a glimpse into how ecosystems can be structured to support entrepreneurs. According to publicly available figures, companies within Dubai Internet City’s ecosystem have collectively raised around AED 8 billion in investment to date.

Looking ahead

These developments connect with broader regional conversations. At events such as the debut edition of GITEX Asia in Singapore in April, the emphasis on fostering talent and data-driven innovation resonated with Southeast Asia’s own ambitions. Both Singapore and Dubai are prioritising ecosystems that enable experimentation, scaling, and cross-border collaboration.

Efficient data management will be central to accelerating AI adoption. As Southeast Asian start-ups look to new markets, examining how ecosystems such as Dubai’s are structured provides lessons on what it takes to integrate infrastructure, policy, and global talent into meaningful innovation pathways.

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Image courtesy: DALL-E

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