How sustainable materials and AI are shaping NEOM, Masdar City, and Dubai’s new developments

NEOM, Masdar City and Dubai, cities that have long been a symbol of wealth and ambition, are not just building new skylines, they’re attempting to redefine what a city can be. With construction sector being one of the largest contributors to global emission, Middle East, flush with capital, ambitious projects, and new masterplans is testing a simple hypothesis: Can the region radically lower the carbon and resource footprint of entire cities through sustainable materials and Artificial Intelligence (AI)?

Governments and developers, in the Gulf, are shifting policies and procurement practices toward low-embodied-carbon alternatives: recycled aggregates, low-carbon concrete, engineered timber, high-performance insulation and off-site modular systems that dramatically cut waste. According to Grand View Research, in 2024, the global green building materials market was estimated to be worth hundreds of billions of dollars, and it is forecast to grow. Moreover, the GCC green building materials market alone reached an estimated USD 10.6 billion in 2024 and, according to an IMARC Group report, is expected to grow significantly as demand for sustainable inputs scales up.

NEOM’s energy and utilities arm, Enowa, explicitly emphasises circular systems and positions the project as a 100%renewables-powered ecosystem that integrates water, energy and industrial systems from the outset. It combines Industry 4.0 technologies with circular economy principles that force the choice of materials toward those that can be reused or easily recycled, while promoting off-site fabrication techniques that shrink construction waste.

For more than a decade, Masdar City has been offering a working prototype of what happens when sustainable material choices meet a systems approach, translating low-carbon urban design into practice. It pairs demonstrable clean energy capacity with district cooling systems, solar generation, and energy-efficient building envelopes with planning that reduces transport demand. Masdar’s broader organisation, its parent group, has also been scaling fast. Its report highlighted growth in clean energy capacity and an organisational push into integrated, low-carbon urban projects. The Masdar model is a reminder that reliable renewable supply makes higher-embodied, energy-intensive solutions (for example, electric construction equipment charged by renewables).

But materials alone won’t be enough, this is where AI becomes a multiplier. AI tools now enable topology optimisation for material efficiency, predict and prevent waste by logistics algorithms (supply chain forecasting, demand matching). In operations, machine learning drives HVAC optimisation (manage buildings in real time, predictive maintenance). For projects on the scale of NEOM or Masdar, with thousands of buildings, millions of square meters and complex infrastructure, AI systems can turn millions of data points into continuous efficiency gains.  NEOM and related initiatives are already integrating AI for water, energy and materials planning, while Oxagon’s industrial model assumes broad adoption of automation and AI in production.

Dubai’s trajectory shows how regulation and market amplify these technological shifts and incentives accelerate adoption. Municipal green building regulations, alongside certifications such as LEED and local green building systems, have driven a rapid uptake of sustainable construction practices, pushing developers to pursue energy-efficient envelopes, reduced water use, and green materials. According to Dubai Municipality, the city’s policy environment, paired with developers’ appetite for premium assets that offer lower operating costs and resilience to climate risk, creates an ecosystem where sustainable materials and smart building systems are not only environmentally desirable but financially sensible.

The Grand View Research estimates show the Gulf’s green-building sector and related materials markets expanding rapidly, with market valued in the mid-to-high tens of billions of dollars and forecast to double-digit compound annual growth rates in the coming five years. That inflow of capital matters because sustainable materials often carry higher up-front cost but deliver lower lifecycle costs, while AI and automation substantially reduce construction and lifecycle operating overruns. In other words, together they improve the return profile for long-term investors.

Yet ambition collides with practical constraints. Supply chains for low-embodied materials must scale quickly; while those in the region remain sensitive to cost, logistics, and local standards. Skilled labour in advanced assembly and data-science expertise to drive AI systems are limited and must be cultivated. Governance questions are also pressing: who owns the data generated by smart urban systems, how is privacy protected, and how do we ensure that AI allocates resources such as water, energy and mobility fairly. These are governance design problems, solvable, if tackled deliberately.

There are three pragmatic approaches for solving them. First, governments and project sponsors can accelerate local manufacturing of green materials through incentives and public-private partnerships. Second, procurement rules should favour lifecycle carbon and circularity over the lowest upfront price; that shifts incentives toward durable, reusable materials and off-site fabrication. Third, data-governance frameworks must be established from the outset: transparent rules about ownership and enable third-party innovation without commercial capture.

If NEOM, Masdar City and Dubai’s new districts can scale these approaches, the payoff will be tangible: lower lifecycle emissions, less construction waste, healthier indoor environments, and long-term savings for investors and taxpayers. The Middle East can move beyond being a market for imported technology to becoming a global crucible for sustainable urban practices, provided policymakers, developers and technologists align incentives and share data and best practices.

NEOM, Masdar and Dubai’s new districts are more than national statements; they are testbeds whose lessons could reshape how cities are built globally. If they get it right, prioritising lifecycle outcomes, scaling green materials, and embedding AI from design to operations, Middle East will be measured not only in square metres and skylines, but in the tonnes of embodied carbon avoided and the megabytes of intelligence that keep cities efficient and humane. The world will, for once, be watching not only to admire, but to learn.