One in five UAE businesses experienced cyber incidents in the past year that they believe involved artificial intelligence, according to new research from business insurer QBE.
The survey found that 21 per cent of UAE businesses reported AI-linked cyber incidents over the past 12 months, with phishing messages and deepfake images among the most common methods.
The findings are based on a global QBE study of more than 6,000 businesses across 15 countries, including 406 organisations in the UAE with 100 to 2,000 employees.
The report found that 82 per cent of UAE businesses are already using AI, while 17 per cent are looking into it.
Almost all respondents, 97 per cent, expect AI to have a positive impact on their business in the next two years. That includes 53 per cent who expect a very positive impact and 44 per cent who expect a somewhat positive impact.
UAE companies using AI said their main reasons include increasing productivity, improving operational efficiency, enhancing customer experience and retention, driving innovation and improving decision-making.
According to QBE, 49 per cent of UAE businesses using AI cited productivity as a reason for adoption, followed by operational efficiency at 45 per cent, customer experience and retention at 43 per cent, innovation at 41 per cent and decision-making at 38 per cent.
Sarah Hamlat, Senior Cyber Underwriter at QBE Middle East, said: “It’s encouraging to see UAE businesses adopting AI for productivity and innovation while putting governance around how it’s used. But AI risk doesn’t stop at the internal perimeter. Organisations need the same level of discipline and oversight across their third-party ecosystem, because weaknesses in the supply chain can quickly become risks to the business itself.”
The research also found that third-party exposure remains a major risk.
Over the past 12 months, 63 per cent of UAE businesses experienced one or more cyber events. Among affected companies, 73 per cent said at least one cyber attack was related to a supplier, while 68 per cent experienced revenue loss.
QBE said 31 per cent of businesses experienced a cyber incident that caused at least one full day of business interruption.
The study also found that 67 per cent of UAE respondents are concerned about risks arising from how suppliers use AI.
Companies are increasing spending in response. Around 75 per cent of UAE respondents expect to raise their IT cybersecurity budgets, including 43 per cent who plan increases above inflation.
However, cyber preparedness remains uneven.
While 65 per cent of businesses with 100 to 2,000 employees have cyber insurance, nearly one-third, or 32 per cent, remain uninsured. The survey also found that 27 per cent do not have an incident response plan.
Hamlat said, “The UAE is a pioneer in the adoption of Artificial Intelligence, and it is encouraging to see businesses following this journey with a strong focus on security. As new technologies such as AI become embedded in operations, effective risk management remains fundamental to ensuring sustainable and resilient growth.”
QBE said businesses should identify critical assets, threats and vulnerabilities, define acceptable risk levels, prioritise mitigation strategies, test recovery plans and stress test crisis management.
The insurer also said companies should improve third-party risk controls by implementing strong identity and access management, carrying out configuration audits, encrypting sensitive data across cloud environments, evaluating third-party providers and establishing clear protocols for supply chain exposure.
