Balancing Innovation and Oversight: Evaluating the UAE's Approach to AI Governance

As artificial intelligence (AI) continues to reshape industries, nations worldwide confront a critical question: How should AI be governed? Should regulations be rigid and rules-based, or flexible and principles-driven? The UK's reintroduction of The Artificial Intelligence (Regulation) Bill (2025) has brought this debate to the forefront, highlighting the tension between statutory AI regulation, which relies on rigid, rules-based frameworks, and adaptable, principles-based regulation, which emphasizes flexibility and context-driven guidelines. 

This debate is crucial for shaping the future of AI governance, as it underscores the need to balance innovation with ethical considerations. With profound implications for both innovation and ethics, the Bill's journey illustrates the challenges of finding the right regulatory approach in a rapidly evolving field.

Global Perspectives: US and EU Approaches

The United States has adopted a sector-specific, light-touch approach to AI regulation, relying on existing laws and agencies to address AI-related issues across specific industries. This approach fosters innovation but lacks a unified framework, resulting in gaps in oversight.

In contrast, the European Union has taken a more centralized and stringent approach, prioritizing the protection of individual rights and the ethical use of AI. The "EU Regulation 2024/1689 laying down harmonised rules on artificial intelligence" (EU AI Act) which is the first-ever comprehensive legal framework on AI worldwide, aims to classify AI systems based on risk, imposing corresponding regulatory requirements to ensure accountability.

While the EU's AI Act ensures a high level of consumer protection, critics argue that it may stifle startups due to compliance costs. Conversely, the US model fosters rapid innovation but risks regulatory blind spots, raising concerns over accountability in high-risk AI applications.

These contrasting approaches highlight the challenges of balancing innovation with oversight and the complexities of regulating AI effectively. Which model strikes the right balance between fostering innovation and ensuring ethical accountability?

The UAE’s Regulatory Framework:

A Balanced Approach

The UAE is recognized for its substantial efforts in fostering innovation and developing a supporting regulatory environment. The UAE’s National AI Strategy 2031 aims to position the country as a global hub for AI innovation, with a focus on key sectors such as healthcare, education, transportation, and energy.  

In 2017, UAE became the first country to appoint a Minister of State for Artificial Intelligence, demonstrating its commitment to integrating AI into its economy and society. The Dubai Universal Blueprint for Artificial Intelligence introduces tailored regulatory requirements for AI applications requiring the government entities to appoint Chief Artificial Intelligence Officers to oversee compliance.

The UAE emphasizes high-level principles such as fairness, transparency, and accountability through its AI Ethics Principles. The UAE AI Charter (2024), with its 12 guiding principles on inclusivity and transparency, offers a foundation. These guidelines are not legally binding but can trigger enforcement under broader laws, such as the Personal Data Protection Law (PDPL).

While the UAE has not yet enacted AI-specific legislation, it currently leverages broader legal frameworks to uphold ethical practices in AI development and deployment. This approach, though flexible, may present challenges in establishing clear accountability measures for emerging risks and could potentially lead to ambiguity when confronted with unprecedented scenarios. The evolving nature of AI technology necessitates ongoing evaluation and adaptation of regulatory strategies to ensure comprehensive oversight and ethical governance.

CoThrive Strategic Choice: UAE as a Hub

The UAE has invested heavily in infrastructure, research, and talent development to attract global AI companies. Initiatives like the Dubai Future Foundation and Abu Dhabi’s Hub71 provide support for tech ventures, offering funding, mentorship, and access to the innovation ecosystem. Programs like the Dubai Centre for Artificial Intelligence Accelerator have already attracted over 600 startups from 55 countries, with selected participants receiving tailored support to develop innovative solutions and projects such as AREA2071 foster collaboration between startups and government entities to drive advancements in urbanization, education, and smart mobility.

The UAE's AI ecosystem offers substantial opportunities for innovation. Its commitment to AI development, supported by a flexible regulatory framework, creates an environment conducive to advancing cutting-edge solutions while emphasizing ethical considerations. This approach fosters experimentation and progress while maintaining high standards of transparency and accountability.

At CoThrive Ventures, we recognize the importance of responsible innovation in shaping the future of AI, and the UAE’s regulatory framework aligns with this vision. As AI governance evolves, CoThrive Ventures is committed to not only leveraging the UAE’s regulatory landscape but also shaping it. By collaborating with policymakers, industry leaders, and researchers, we aim to drive responsible AI development that benefits businesses and society alike.

Hassan Razavi

Chief Legal & Compliance Officer