As war rages on in the Gaza Strip, its visual narrative is shaped by scenes of tanks and rubble familiar to the public since the global war on terror. Yet a closer inspection reveals a futuristic battlespace, as much defined by algorithms and robotics as by gunfighting and air strikes.

The IDF’s miniature Firefly “suicide” drones navigate autonomously through Gaza’s streets. Namer and Eitan armored personnel carriers traverse the rubble, deploying Edge 360 artificial intelligence (AI) systems for algorithmic threat detection. Equipped with Trophy, the world’s first “Active Protection System,” Israeli Merkava tanks launch automated projectiles that intercept Hamas’ missiles and rocket-propelled grenades.

AI-powered drones attempt to map Hamas’ vast tunnel network as IRIS robots and Vision 60 “robodogs” maneuver through it, applying specialized sensors and cameras that detect objects and people. According to its start-up creators, IDF infantry wields rifles enhanced by “SMASH,” an AI-enabled optic sight that turns every soldier into a sniper. Meanwhile, a diminutive, semi-autonomous robot named Jaguar patrols Gaza’s border fence.

Sitting above it all, the “Fire Weaver” AI system connects intelligence-gathering sensors to weapons in the field. The “Gospel” and “Lavender” systems use machine learning to automatically generate target recommendations, sifting through vast amounts of data from sprawling surveillance networks. While prior to 2020, the IDF may have needed ten days to locate and approve ten targets, autonomous systems permit the engagement of ten times as many targets within that time frame.

The Geoeconomics of Military AI

Many defense analysts have announced the next “revolution in military affairs,” in which technological innovation, specifically AI, radically transforms the conduct of war, alters the balance of power equations, and shapes new security threats. The integration of technological systems capable of simulating and eclipsing human intelligence into military institutions will redefine decision-making and strategy. Similarly, the development of lethal autonomous weapons systems (LAWS), which choose targets or even attack without human involvement, will pose grave challenges to arms control calculations and international law alike.

While Washington and Beijing may take center stage in the tussle for technological predominance, the Middle East is emerging as the unlikely incubator of the military revolution. Businesses and governments in the UAE, Saudi Arabia, and Israel, in particular, have heavily invested in advancing autonomous military technologies. Profuse R&D budgets, advanced infrastructure, strategic ties, and access to skilled labor have helped the three highly militarized nations gain a head start in the new AI defense landscape.

EDGE Group, the Emirati government arms manufacturer, focuses on “autonomous, smart weapons and electronic warfare” and revealed eleven new autonomy-enabled unmanned vehicles at the 2023 IDEC conference, constituting the majority of their fourteen new systems. EDGE also funded the development of ADASI’s “Garmousha” drone, the UAE’s first indigenous drone operated with AI. In Saudi Arabia, the King Abdulaziz City for Science and Technology boasts expansive programs for the development of advanced unmanned drones and robotics. In 2020, the state-owned Saudi Arabian Military Industries (SAMI) acquired Advanced Electronics Company (AEC) in the kingdom’s largest-ever defense industry deal, signaling its prioritization of high-tech military capabilities.

The focus on indigenous defense production forms a key pillar in the two Gulf monarchies’ broader economic development efforts aiming to replace hydrocarbon dependency with AI-driven self-sufficiency, as underlined throughout Saudi Vision 2030 and UAE 2031. AI is viewed as essential for digital transformation in manifold sectors across Saudi Arabia, including healthcare, public services, energy, water, manufacturing, and transportation. Uniquely, the UAE has appointed the world’s first minister for AI, demonstrating its importance for governing the Emirates. Faced with human capital challenges and meager non-energy industrial bases, the Gulf petrostates hope to harness AI as a “leapfrogging technology” in search of sustainable economic growth as the world faces an energy transition. Estimates suggest that by 2030, spending on AI in the Middle East could potentially reach $320 billion, with Riyadh and Abu Dhabi the most prominent investors. Almost 40 percent of the companies in the UAE and 45 percent of the companies in Saudi Arabia are preparing for an automated and AI-led working environment.

Over the past thirty years, Israel’s booming commercial high-tech industry propelled the growth of a specialized defense industry, aided by a public investment rate of 4 percent of GDP in civilian R&D, among the world’s highest. Israel’s defense innovation is a product of intensive interaction between military and civilian sectors. Its start-up workforce is comprised mainly of veterans of the IDF’s technological units, and state-owned defense powerhouses such as Rafael and IAI furnish university research budgets. With a record $12.6 billion in exports in 2022, a 50 percent increase over the previous three years, Israel’s high-tech defense industry holds a vital stake in its wider economy.

The Shifting Security Calculus

While the economic modernization forces Israel and Gulf states to nurture indigenous AI innovation, national security imperatives ultimately account for the region’s unique interest in LAWS. Such pressures are, in part, a product of their status as smaller powers. Militarised AI can be deployed as a “surrogate” in warfare, granting small states a “force multiplier” against more populous rivals with quantitative advantages in conventional arms and human capital. In view of the limited size of the UAE and Saudi Arabia’s armed forces and Israel’s dependence on reserve mobilization, integrating AI in the military theoretically guarantees high efficacy while reducing economic and human costs.

The changing nature of regional security threats demands rapid technological innovation. The extensive deployment of drones by non-state actors such as the Iran-backed Houthis and Hezbollah has birthed unprecedented security risks. In 2019, Saudi Aramco oil processing facilities in Abqaiq and Khurais were attacked by Iranian drones, which managed to evade conventional radar. This was a crucial trigger for Riyadh to develop its own high-tech anti-drone capabilities. In January 2022, Houthi drone attacks targeted three Emirati oil tankers and an airport extension, highlighting the danger of asymmetrical warfare to the UAE’s economic security and international reputation for stability. Similarly, Hamas has deployed both autonomous underwater drones and unmanned aerial vehicles against Israel with varying success.

In a strategic environment in which states no longer hold a monopoly on advanced technology and long-range weapons, the speed and efficacy of defense capabilities must be increased to meet new challenges. As seen in Saudi Arabia, conventional radar systems struggle to detect drones in real time, often failing to distinguish UAVs from birds or debris. Many of the Houthi drones targeting Abu Dhabi flew at low altitudes to escape detection by the UAE’s U.S.-built Terminal High Altitude Area Defense and Patriot interceptors. AI systems employing advanced sensors, cameras, and acoustics yield a more accurate and effective response. Machine learning algorithms can recognize distinct drone signatures. Moreover, today’s adversaries are decentralized, time-sensitive targets demanding the immediate engagement only computing power can provide.

Israeli and Gulf strategists are aware of Iran’s increasingly sophisticated militarisation. In January 2021, Tehran flexed its muscles with the “Great Prophet 15” exercise that showcased the country’s first autonomous suicide drones. The Islamic Republic’s “Research and Self-Sufficiency Jihad Organization of the Army Ground Force” is believed to play a central role in the development of AI-enabled weapons systems, elucidated by its recent exhibit of the armed Heidar-1 combat robot. Brigadier General Mohammad Hassan Nami has claimed that Iran will possess completely autonomous systems on the battlefield by 2024.

As the preponderance of Houthi, Hezbollah, and Hamas drones can be traced to Iranian smuggling and technology transfer, the Israel-Gulf axis is faced with the daunting prospect of AI-armed non-state militias at their gates.

New Tech, New Alliances

In 2021, EDGE and Israel’s IAI agreed to co-develop a fully autonomous anti-drone system. At the Middle East’s first-ever drone conference in Abu Dhabi in 2022, the UAE proposed a “regional shield” to intercept drones. Tellingly, it was the Emirati Minister for Artificial Intelligence, Omar bin Sultan Al-Olama, who addressed the crowd, warning that “drone systems have become cheaper and more accessible than ever before…and this accessibility allows these systems into the hands of terrorist groups…” As such, the new AI-driven defense paradigm is cementing ties among former foes as traditional political antagonisms collapse under the weight of national security crises.

Indeed, shortly after the signing of the Abraham Accords (AA), Israel and the UAE established a joint venture on commercial artificial intelligence and big data technologies. The long-term defense implications of the collaboration, initially designed to combat COVID-19, are apparent from the parties involved: Emirati AI pioneer Group 42 (G42) and Israeli state defense giants IAI and Rafael (the latter is the manufacturer of the Iron Dome and David’s Sling air defense systems). In September 2022, Israel agreed to sell an advanced air defense system to the United Arab Emirates alongside Rafael-made SPYDER mobile interceptors to bolster their anti-drone defenses. Rafael and another Israeli arms powerhouse, Elbit Systems, established UAE-registered companies in 2021 with the explicit aim of long-term cooperation with the Emirati military. Israel has boasted $3 billion in arms deals with Middle Eastern states since the signing of the AA, with nearly a quarter of its defense exports in 2022 going to regional signatories.

Introduction