AI and AI-enabled startups attracted $678 million in MENA venture capital funding during the first half of 2026, accounting for 50% of the region’s total, according to MAGNiTT’s latest review. That share more than doubled from 22% a year earlier.
The growth came alongside a sharp decline in deal activity. AI transactions fell 56% year on year, from 121 in H1 2025 to 53 in H1 2026, representing 25% of all MENA deals. The UAE captured 93% of AI funding, while FinTech and Transport & Logistics received the largest portions of capital.
Funding was also concentrated in larger rounds. Deals of $20 million or more represented just 9% of AI transactions but accounted for 82% of total AI funding.
MAGNiTT said 17 MENA-focused venture funds have targeted a combined $1.65 billion since 2024. By H1 2026, they had deployed $197 million, leaving an estimated $1.45 billion in dry powder. Funds launched in 2026 had deployed $60 million, with 55% going to Saudi-based startups, $7 million to the UAE and the remainder across other MENA markets.
The review also identified four dedicated AI-focused venture funds launched during the period.
Source: Middle East AI News
