Article contents:
- Introduction: An existential race in the tech world
- From uncertainty to revenue: Microsoft’s turning point
- Widespread adoption: Half of S&P 500 companies
- Promising opportunities in the Gulf: UAE and Saudi Arabia lead the way
- Three signals investors should monitor
- Economic and geopolitical priority
- Conclusion: A dual path toward sustainable returns
Introduction: An existential race in the tech world
Artificial intelligence continues to fundamentally transform business models and the global economy, as top executives across the world’s leading technology companies pursue a single compelling goal. Denny Fish, technology portfolio manager at Janus Henderson, described this race as «an existential matter, whether on the positive or negative side.» He noted that the consequences of this revolution will impact governments, investors, and businesses over the long term, particularly in the Gulf region, where AI is shaping markets and policies across various sectors.
From uncertainty to revenue: Microsoft’s turning point
Investor sentiment toward artificial intelligence was not clear-cut initially. In early 2025, concerns emerged as markets questioned whether massive capital spending would translate into revenue. However, this uncertainty dissipated following Microsoft’s April earnings report. Additional infrastructure provided greater supply matched by rising revenue, marking a turning point that delivered tangible returns and proved that AI investment can be profitable.
Widespread adoption: Half of S&P 500 companies
This reassessment coincided with the broadening adoption of artificial intelligence. Fish explained that roughly half of the companies listed on the S&P 500 index incorporated AI into their first-quarter reports, highlighting the rapid spread of its applications across diverse industries. Nevertheless, he believes the market still underestimates AI’s impact on earnings. He stated: «Microsoft exemplifies this dynamic; its core business revenue accelerated while headcount decreased, a formula pointing to a notable profit margin expansion.»
Promising opportunities in the Gulf: UAE and Saudi Arabia lead the way
Global competition is translating into local opportunities within the Gulf region. In the UAE, Microsoft invested $1.5 billion in G42 to accelerate AI collaboration. Meanwhile, in Saudi Arabia, Microsoft completed the construction of three Azure data center sites, which are expected to become operational in 2026. Concurrently, the Public Investment Fund and Google Cloud launched a $10 billion program to establish a global AI hub near Dammam. These substantial investments place the region at the core of the AI infrastructure and returns landscape.
Three signals investors should monitor
Fish highlighted three signals that investors should watch going forward:
- Profit margin expansion: Driven by AI tools contributing to increased productivity.
- The pace of data center construction: Which will determine how quickly new capacities come online.
- The balance between comprehensive platforms and specialized models: Which achieve faster profitability.
Economic and geopolitical priority
According to Fish, governments are recalibrating their policies, increasingly viewing artificial intelligence as a foundational pillar of economic power and national security. He emphasized that these activities «highlight how AI has become both an economic and geopolitical priority.» This means that AI-related investments and policies will be driven not only by commercial considerations, but by national strategies as well.
Conclusion: A dual path toward sustainable returns
Artificial intelligence is no longer just an emerging technology; it has become a fundamental driver of the global economy. For investors, understanding the dual path—combining the development of advanced general capabilities on one hand, and a focus on short-term revenue drivers on the other—will be key to identifying sources of sustainable returns. With the Gulf region increasingly positioning itself in this landscape, the opportunities available to companies and investors in the area look more promising than ever.
Frequently asked questions
Q: Why is artificial intelligence so important to the economy?
A: Because it can significantly boost productivity across all sectors, from software development to marketing, leading to wider profit margins and the creation of entirely new business models.
Q: What is the Gulf region’s role in the AI revolution?
A: Gulf countries, particularly the UAE and Saudi Arabia, are investing billions of dollars in building data centers and partnering with major tech companies, aiming to become regional and global hubs for AI infrastructure.
Q: What should investors look for in AI companies?
A: They should look for companies that not only possess advanced technology, but also have a clear path to generating revenue and profits from that technology, while monitoring the pace of required infrastructure buildout.
