BY SRIJITH KN & SUBRATO BASU

As AI spending rises and experimentation gives way to accountability, the real challenge for business leaders is no longer access to technology, but proving value, controlling cost and redesigning how organisations work.

Every year, the technology industry promises a breakthrough that will change everything. New models arrive, computing capacity expands and investment reaches new highs. Then, somewhere between the product demonstration and the quarterly earnings call, someone asks the question that matters most:

What did all of this actually improve?

That question came into sharper focus in 2026.

Artificial intelligence moved deeper into everyday business. Companies deployed assistants, experimented with agents and embedded AI across customer service, software development, compliance, finance and operations.

Yet adoption turned out to be the easy part.

Installing an AI assistant is relatively straightforward. Redesigning an organisation around it is not.

Fragmented systems, poor-quality data, unclear ownership, weak governance and sceptical employees do not disappear because a company has purchased another software licence.

Businesses do not need another year of impressive demonstrations. They need to know whether AI is helping them make better decisions, serve customers more effectively and run their operations more reliably.

That shift is turning AI from primarily a technology question into a management one.

From experimentation to accountability

The adoption numbers appear impressive.

McKinsey found that nearly nine in ten survey respondents reported regular organisational use of AI in at least one business function. Gartner, using a different measure, found that only 22% of organisations had successfully scaled AI across multiple business units or adopted an AI-first approach.

The methodologies are different, but together they point to an important distinction: using AI is not the same as changing how a business operates.

The economics reinforce that concern.

In McKinsey’s Technology Trends Outlook 2026, one survey found that 93% of respondents had exceeded their AI budgets. Another found that only 37% of companies could attribute a positive EBIT impact to their AI programmes.

Those numbers create an uncomfortable boardroom question.

If spending continues to exceed expectations while measurable returns remain limited, what exactly are organisations paying for?

The clearest returns are likely to emerge where companies begin with a defined business problem: reducing customer-service resolution time, accelerating code review, simplifying invoice handling or strengthening compliance.

What becomes harder to justify is the proliferation of pilots with no accountable owner, no performance baseline and no clear route to economic value.

Automating a broken process can simply make the breakage happen faster.

Agentic AI raises the stakes

Agentic AI made this management challenge more significant in 2026.

Traditional generative AI largely responded to requests. Agents can increasingly perform multistep activities, interact with systems and execute actions.

That creates more opportunity, but it also introduces more cost, operational risk and responsibility.

Gartner has forecast that more than 40% of agentic AI projects will be cancelled by the end of 2027 because of escalating costs, unclear business value and inadequate risk controls.

It is a forecast rather than an observed failure rate, but the warning matters.

Giving software more autonomy only increases the need for organisations to define who owns the outcome, who monitors the process and who can intervene when something goes wrong.

The question for leaders is therefore becoming less about what an AI agent can do and more about what the organisation should allow it to do.

The economics nobody puts on the slide

AI is also forcing companies to think differently about technology costs.

The International Energy Agency reported that capital expenditure by five major technology companies exceeded $400 billion in 2025 and was expected to rise by another 75% in 2026.

The physical foundations of AI require enormous amounts of computing infrastructure, electricity, cooling, networking, land, semiconductors and highly specialised talent.

An individual AI task may become cheaper while the total technology bill continues to grow simply because usage expands.

That is not necessarily a problem if the additional activity creates measurable value.

But somebody needs to be able to explain what the extra expenditure produced.

Did it generate more revenue?

Did customers receive better service?

Did employees become more productive?

Did the organisation reduce risk?

Technology and finance leaders increasingly need to measure the cost per useful outcome, rather than concentrating only on the price of individual models, tokens or software licences.

Energy, computing capacity and infrastructure resilience now belong in the same boardroom conversation as digital transformation.

AI also creates a wider economic question

There is another issue that sits beyond corporate productivity.

A business may be able to reduce certain labour requirements through automation, but an economy still depends on people earning, consuming, creating businesses and paying taxes.

If productivity gains do not translate into new industries, new forms of employment or greater economic opportunity, the benefits become harder to sustain.

Reskilling cannot therefore be treated simply as a corporate social-responsibility programme.

It increasingly belongs at the centre of technology strategy.

The real measure of intelligent technology should not be how many jobs it eliminates or how many tasks it completes. It should be whether it creates durable value for enterprises while expanding economic opportunity around them.

The Gulf moves from technology buyer to builder

This is particularly relevant in the Gulf.

For years, the region was often described primarily as a major buyer of global technology. That description increasingly feels incomplete.

Across the UAE, Saudi Arabia and the wider Gulf, governments and businesses are investing in AI infrastructure, cloud capacity, digital government, data centres and technology ecosystems.

Stargate UAE, the planned one-gigawatt AI infrastructure cluster in Abu Dhabi, illustrates the scale of that ambition. Its first 200 megawatts were scheduled to come online during 2026.

Abu Dhabi’s ambition to build an AI-native government by 2027 and Dubai’s support for digital entrepreneurship point in the same direction.

But infrastructure alone does not create prosperity.

The more important question is whether that infrastructure lowers the cost of innovation and makes advanced technology accessible to the companies that drive the region’s everyday economy.

Can a UAE SME use AI to compete more effectively with a multinational?

Can a local healthcare provider deploy specialised intelligence without building an enormous internal technology operation?

Can a logistics company use automation to improve reliability rather than simply add another layer of software?

The Gulf has invested heavily in technological ambition. The next chapter will be about making that ambition useful.

That means moving from importing technology to developing capabilities, intellectual property, businesses and talent around it.

Innovation moves into the physical world

The technology conversation is also becoming broader than generative AI.

Physical AI is bringing intelligence into robotics, logistics, manufacturing, healthcare and mobility.

Digital twins, edge computing and intelligent energy systems are connecting digital decisions to physical operations. Smaller, specialised AI models may also offer better economics and governance than enormous general-purpose systems for narrowly defined industry tasks.

Quantum computing continues to advance, although business leaders should remain cautious about claims of immediate universal commercial impact.

The more urgent issue for many organisations is post-quantum cybersecurity.

Confidential information protected today could potentially become vulnerable as computing capabilities evolve, meaning organisations handling long-lived sensitive data need to begin thinking about cryptographic resilience well before large-scale quantum computing arrives.

Across these technologies, the competitive advantage is unlikely to come from collecting the greatest number of tools.

It will come from integrating the right technologies into an operation that works.

Trust becomes part of the business model

As AI systems gain access to more sensitive information and perform more consequential activities, cybersecurity becomes inseparable from business strategy.

The World Economic Forum’s Global Cybersecurity Outlook 2026 described an environment shaped by AI-enabled threats, geopolitical fragmentation and uneven cyber resilience.

AI agents interacting with financial systems, customer information or operational infrastructure raise the importance of identity controls, authorisation, monitoring and human intervention.

Cybersecurity can therefore no longer be treated simply as the responsibility of the security department.

It is increasingly about business continuity, reputation and customer trust.

The companies that can demonstrate that intelligent systems are secure, explainable and accountable may find that trust becomes a genuine competitive advantage.

2027: the numbers will have to add up

If 2026 was the year organisations experimented with how far AI could go, 2027 is likely to bring much tougher questions about whether those investments make economic sense.

A good demonstration will matter less than what a company can responsibly allow a system to do.

Agents will begin taking responsibility for defined activities, but each will require boundaries, monitoring and a human being who ultimately owns the consequences.

Boardroom conversations should shift from:

• How many AI tools have we deployed?
• to:
• What does this process cost now?
• How much faster is it?
• Has the error rate fallen?
• Are customers noticing the difference?

That scrutiny will extend beneath the software layer.

Energy availability, sovereign computing capacity, regulatory requirements and infrastructure resilience will increasingly influence where companies choose to invest.

The same scrutiny will reach the workforce.

Employees will need technical fluency, but they will also need business judgement: the ability to understand exceptions, question automated recommendations and take responsibility when systems get something wrong.

Access to another AI model will not be the defining advantage.

An organisation that operates better — at a cost that survives examination — will be.

The question worth taking into 2027

As 2026 closes, business leaders should temporarily set aside the question of how much technology their organisations have adopted.

Instead, ask what the investment actually changed.

Did serving a customer become simpler?

Did an expensive process become more efficient without becoming less reliable?

Did employees gain the ability to spend more time on valuable work?

Can the improvement be seen in the numbers?

A technology budget is ultimately a statement of belief about the future.

In 2027, belief will not be enough.

AI adoption alone will no longer be impressive. The organisations that stand out will be those that can explain, in plain business terms, what they spent, what improved and who benefited.

And that may be the clearest indication yet that AI is becoming less of a technology problem — and much more of a management one.

Subrato Basu is an author, adviser and speaker on AI strategy and technology cost management. With nearly three decades of experience advising C-suite leaders, he helps organisations across North America, Asia Pacific and the Middle East turn technology investment into measurable business value.

Srijith KN is Senior Editor at Integrator Media, who is hands-on in covering enterprise technology, artificial intelligence, cybersecurity and the digital economy across the Middle East.

On 2 November 2026, XPENG and Gulf Star Motors put Physical AI, flagship SUVs and design culture in front of UAE guests. 

Here is what the Brand Night and New Product Launch felt like from the floor.

Dubai has seen plenty of smart EV launches. Fewer evenings try to stage the whole idea of AI mobility in one room: cars, software, design language and a glimpse of what comes after the road.

On 2 November 2026, that is what XPENG Brand Night and New Product Launch set out to do, hosted with Gulf Star Motors, a subsidiary of Ali and Sons and the official distributor of XPENG in the UAE.

The brief was clear from the moment the programme began. This was not only a reveal of two SUVs. It was a statement that XPENG wants UAE buyers to see the brand as a technology company that happens to make cars, and that Dubai remains the beachhead for that story.

Two Flagships, One UAE Brief

The headline products were the G9L and the GX, both presented for UAE customers. XPENG positions the G9L as its Next-Gen AI Flagship SUV, offered with battery-electric and Kunpeng Super Range Extender powertrains. Official materials cite an overall length of 5,120 mm and a wheelbase of 3,100 mm, with an AI cockpit and advanced driver-assistance technologies aimed at local buyers who want flagship presence without giving up software-led features.

The GX, XPENG’s full-size six-seat flagship SUV, was shown with the same dual choice: battery-electric and Kunpeng Super Range Extender. XPENG quotes a pure-electric range of up to 430 km and a combined range of up to 1,585 km for the Super Range Extender configuration on an 800V architecture, a pairing that speaks directly to UAE driving: long distances, summer loads, and the need for range confidence beyond the city.

The GX also carries the computing story that XPENG wants associated with its upper models: Turing AI computing of up to 3,000 TOPS and the VLA 2.0 intelligent-driving system, framed here as advanced driver assistance and an AI-powered cabin rather than science fiction. On the night, that distinction mattered. Guests were not asked to believe in a driverless future in the abstract. They were asked to look at hardware and interfaces that already sit in production-bound products.

Beyond the Unveil

The programme deliberately stretched past a spotlight moment. Guests experienced the GX in person, a useful reminder that the model has already drawn strong UAE interest, with more than 500 confirmed orders reported ahead of launch. In a market that can be sceptical of new EV brands until the ownership story feels solid, that pre-launch demand figure is part of the narrative as much as any stage lighting.

Workshops on XPENG’s Vital Flow design language sat alongside the metal. Vital Flow, inspired by Design VP JuanMa Lopez, formerly Head of Exterior Design at Ferrari, emphasises flowing, muscular surfaces that look alive even when a vehicle is standing still. For a UAE audience used to premium sheet-metal theatre, the pitch was less about ornament and more about motion held in stillness, a design line that tries to make technology feel intentional rather than bolted on.

There was also a session on XPENG’s flying car programme, the piece of the evening that most clearly connects Brand Night to the brand’s Physical AI agenda of intelligent vehicles and advanced air mobility. It is the kind of slot that can tip into hype. On this programme it was presented as part of a wider stack, not as a separate circus act.

Physical AI, Explained for Dubai

That climate line is not decorative copy in the UAE. Heat, highway pace and uneven charging density still shape purchase decisions, which is why range-extender messaging sits so comfortably next to pure-electric talk here.

The phrase Physical AI can sound abstract until you hear it next to concrete products. On Brand Night it meant AI cars with serious onboard compute, a design system with a named chief, and air-mobility ambitions shown in the same programme as showroom SUVs. Whether every guest left fluent in the jargon is beside the point. The structure of the evening forced the association: software, design and future mobility were not side rooms. They were the spine.

A Local Network Behind the Night

XPENG did not arrive in Dubai as a stranger. The UAE was XPENG’s first market in the GCC. The company announced its UAE partnership in February 2024 and opened the market on 19 October 2024 with the G6 and G9. Gulf Star Motors has since established showrooms on Sheikh Zayed Road in Dubai and in Abu Dhabi, the retail footprint that makes a Brand Night feel like a continuation rather than a cold start.

After-sales has been part of that story too. XPENG’s first Middle East spare-parts warehouse in Jebel Ali Free Zone was inaugurated on 15 October 2025.

Why the UAE Timing Fits

The Brand Night and New Product Launch arrives as the UAE continues to lead the GCC on electric-mobility readiness. According to Arthur D. Little’s GEMRIX 2026 as reported by WAM, the UAE ranked first among GCC markets and 22nd globally, with electric vehicles accounting for around 9 percent of new vehicle sales in 2025, about 2,800 charging points nationwide, and a national ambition for electric and hybrid vehicles to make up 50 percent of vehicles on its roads by 2050.

Dubai aims for electric vehicles to represent more than 15 percent of its fleet by 2030. The Brand Night and New Product Launch sits within that national drive under the UAE Net Zero 2050 Strategy.

Those numbers do not make any single launch inevitable. They do explain why a night built around AI mobility, long-range electrified SUVs and after-sales confidence can land cleanly here. Net Zero 2050 is policy context. Brand Night was product and persuasion.

What Stayed With Us

Leave the slogans aside and the evening still had a practical shape. Two SUVs for UAE customers. A design language with a named lead. A flying-car session that kept Physical AI from sounding like a brochure heading alone. A distributor network already on Sheikh Zayed Road and in Abu Dhabi, with a JAFZA parts hub behind it.

Through Gulf Star Motors, XPENG Brand Night and New Product Launch strengthens the brand’s offer of AI-enabled, long-range electrified SUVs for customers across the UAE. The cars will still have to win in traffic, heat and service bays. On 2 November, the brand at least made sure the UAE saw the wider system it wants those cars to sit inside.

The GCC automotive market is undergoing a significant transformation. Chinese manufacturers are expanding their presence, established brands are navigating supply chain disruptions, and consumers are reassessing the economics of vehicle ownership.

At Keyloop Fusion Live Dubai, Srijith KN, spoke with Nour Abu-Safe, Head of Insights & Analytics at AutoData Middle East, about the changing competitive landscape, the impact of regional logistics challenges, and the opportunities emerging for automotive retailers.

Drawing on market intelligence, vehicle valuation data and industry research, she explains why technology alone may not guarantee long-term customer loyalty, why hybrids currently offer stronger residual value, and why the next major opportunity for dealerships could lie in pre-owned Chinese SUVs.

How are disruptions around the Strait of Hormuz affecting established automotive brands, and could the market changes become permanent?

Initially, many believed the disruption would be temporary. However, the data is beginning to show that market conditions are solidifying and businesses are adapting.

Traditional manufacturers, particularly Japanese brands such as Toyota, Nissan and Lexus, are experiencing challenges getting inventory into the region.

Chinese manufacturers have been more agile because several operate their own vehicle carrier fleets and logistics networks. This has allowed them to establish alternative routes into the GCC.

We have seen a 90% reduction in Japanese vehicle imports into the region, linked to the disruption around the Strait of Hormuz.

Alternative routes through ports outside the Gulf and via the Red Sea and Saudi Arabia are increasingly being used. However, these arrangements are creating delays, with vehicles now taking approximately six to eight weeks to reach showrooms.

The important development is that the market is adapting. Some of the alternative logistics routes established during this period could remain in use for years to come.

Are Chinese automotive brands attracting an entirely new generation of buyers, or are they winning customers away from established manufacturers?

It is a combination of both.

Younger consumers, particularly those between 19 and 30, are increasingly attracted to Chinese vehicles because of their styling, advanced technology, competitive pricing and safety features.

For younger families, especially those entering parenthood, these features can be important purchasing considerations.

Chinese vehicles also tend to offer attractive warranty and servicing packages, making them appealing to consumers who want to reduce their overall ownership costs.

Older buyers, particularly those in their 40s and 50s, generally demonstrate stronger loyalty towards established manufacturers and premium brands.

However, Chinese manufacturers are increasingly entering the premium segment as well, and we are beginning to see them capture some of that market share.

These demographic observations are also supported by consumer research, including studies published by YouGov, which we reference in our market analysis.

Chinese vehicles are becoming increasingly sophisticated. But can manufacturers sustain customer loyalty when technology evolves so quickly?

This is one of the most interesting challenges facing Chinese manufacturers.

Advanced technology is a powerful selling point. It looks attractive in marketing materials and helps manufacturers differentiate their vehicles.

However, rapid technological advancement also accelerates depreciation.

When a manufacturer introduces a significantly improved model within a short period, previous model-year vehicles can quickly appear outdated. That creates challenges for residual values and the used-car market.

For dealerships, the opportunity is to identify vehicles that offer a balance between modern technology and proven, practical features.

Hybrid vehicles are an interesting example because they combine improved efficiency with familiar internal combustion technology.

A vehicle that balances innovation with long-term usability may be better positioned to retain customers over five to ten years than one that depends primarily on the latest technology.

Chinese manufacturers are doing many things well, but the next few years will reveal how effectively they manage this challenge.

With affordability becoming increasingly important, how are vehicle financing and leasing models evolving across the GCC?

Vehicle demand remains present, and manufacturers have found ways to maintain supply despite the disruptions.

However, we could see greater pressure on consumer finances over the coming year.

That creates opportunities for financing and leasing providers.

Financing offers with zero down payment are becoming particularly relevant for buyers who may not have sufficient funds available for a substantial upfront payment.

On the leasing side, some operators are reporting demand increases of approximately 30% to 35%.

Consumers still need vehicles for everyday mobility, but some are becoming more reluctant to take on the financial commitment and risk associated with outright ownership.

Leasing offers an alternative that can address those concerns.

What is the biggest opportunity dealerships may be overlooking today that could become particularly important in 2027?

Used Chinese SUVs.

SUVs represent the largest vehicle body-type segment in the region, and the growing population of Chinese SUVs creates a significant opportunity for dealerships.

The first owner typically absorbs much of the vehicle’s depreciation during the initial two to three years. In some cases, that depreciation could be around 50%.

For dealerships, this creates an opportunity to develop certified pre-owned programmes around relatively young Chinese SUVs.

A three-year-old vehicle may still be in excellent condition and covered by its original warranty or service package.

If dealerships can price these vehicles correctly, they can attract buyers who cannot afford a brand-new SUV but still want a modern, well-equipped vehicle.

This could become an important growth segment for the automotive retail industry.

For consumers considering a vehicle purchase today, which offers the strongest proposition: petrol, hybrid, electric or a competitively priced Chinese vehicle?

There is no single answer because the decision depends on individual priorities.

However, when we compare petrol, hybrid and electric vehicles, our current data indicates that hybrids retain their value best.

They offer fuel efficiency while maintaining the familiarity and convenience of an internal combustion engine.

For buyers concerned about long-term value, that makes hybrids particularly attractive.

Chinese manufacturers, meanwhile, are becoming increasingly competitive on design, pricing and technology.

Vehicles such as the ROX 01 and Jetour G700 demonstrate how Chinese brands are entering segments traditionally dominated by established SUVs such as the Toyota Land Cruiser and Nissan Patrol.

The competitive landscape is changing considerably.

One particularly interesting insight from our latest data is that 48% of the new 2027-model vehicles arriving in the UAE are Chinese brands.

That tells us how aggressively these manufacturers are planning their product introductions, expanding supply and positioning themselves to attract both new and existing automotive customers.

The next few years will be particularly interesting as these changes reshape the balance between established manufacturers and emerging competitors.