Market Overview

The GCC smart cities market size reached a size of USD 19.2 Billion in 2025 and is projected to expand to USD 69.0 Billion by 2034, growing at a CAGR of 15.28% during the forecast period of 2026-2034. This growth is driven by rapid urbanization, supportive government initiatives, and the integration of advanced technologies like IoT, AI, and data analytics. Smart cities utilize digital innovations to enhance urban living, optimize resource management, and promote sustainability, leveraging data-driven insights to improve infrastructure and services across the GCC region.

How AI is Reshaping the Future of GCC Smart Cities Market

• AI-powered smart city platforms are optimizing city operations and enhancing sustainability, such as the platform developed for Lusail City, Qatar, which uses AI, machine learning, and data analytics to improve residents' quality of life.
• Government-led digital services, like the "Smart Assistant" and "My City" management platform in Riyadh, leverage generative AI and IoT technologies to enhance sanitation, waste management, and citizen interaction.
• Strategic partnerships combining AI technologies with infrastructure expertise, as seen in the UAE between Tuya Smart and InfraX, are accelerating smart home solutions and energy efficiency.
• AI facilitates real-time data analysis from sensors and citizen engagement, enabling efficient traffic management, energy use optimization, and environmental monitoring.
• The use of AI-driven simulation platforms, like the digital twin platform for Mecca, Medina, and Jeddah in Saudi Arabia, supports urban planning, disaster simulation, and resource management.
• AI supports the integration of renewable energy management and climate adaptation strategies, helping achieve sustainability goals through smart waste management and carbon emission reductions.

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Market Growth Factors

Government Support and Strategic Initiatives play a fundamental role in the growth of the GCC smart cities market. Governing bodies invest heavily in infrastructure, technology, and innovation to elevate urban living and stimulate economic growth. Long-term strategies such as Vision 2030 initiatives promote technological adoption, digital infrastructure, and eco-friendly practices across the GCC. This proactive governmental approach attracts local and international investors, ensuring the continuous development of smart city ecosystems and supporting sustainable urban transformation.

Digital Transformation and Connectivity is a key driver accelerating the adoption of smart city technologies. The region’s commitment to expanding 5G networks, cloud computing, and high-speed internet lays the foundation for interconnected, data-centric urban environments. For instance, Zain’s rollout of its 5G-Advanced network in Kuwait enhances IoT applications, smart city solutions, and supports Kuwait's Vision 2035 digital economy objectives. Enhanced connectivity improves operational efficiency, resource allocation, and fosters innovative infrastructures like self-driving vehicles and intelligent monitoring systems.

Technological Advancements and Innovation significantly propel market growth by enabling advanced urban solutions. Progress in IoT, AI, big data, and cloud computing enhances operational efficiency and supports decision-making through real-time data analysis. For example, ST Engineering’s AI-powered smart city platform contract for Lusail City, Qatar, showcases how such innovations optimize city operations and sustainability. These technologies help the GCC tackle urban challenges including resource management, energy efficiency, and climate resilience, further solidifying the region as a center for technological development.

Market Segmentation

Focus Area Insights:

• Smart Transportation
• Smart Buildings
• Smart Utilities
• Smart Citizen Services

Smart Transportation Insights:

• Smart Ticketing
• Traffic Management System
• Passenger Information Management System
• Freight Information System
• Connected Vehicles
• Others

Smart Buildings Insights:

• Building Energy Optimization
• Emergency Management System
• Parking Management System
• Others

Smart Utilities Insights:

• Advanced Metering Infrastructure
• Distribution Management System
• Substation Automation
• Others

Smart Citizen Services Insights:

• Smart Education
• Smart Healthcare
• Smart Public Safety
• Smart Street Lighting
• Others

Country Insights:

• Saudi Arabia
• UAE
• Qatar
• Bahrain
• Kuwait
• Oman

Recent Development & News

• June 2025: Naver completed a large-scale digital twin platform covering Mecca, Medina, and Jeddah, using high-resolution 3D models and real-time data over 6,800 square kilometers to optimize urban planning and disaster simulations, enhancing Saudi Arabia’s smart city initiatives.
• May 2025: Oman announced plans for two low-carbon smart cities in Jebel Akhdar and Muscat, powered entirely by renewable energy and designed to accommodate up to 18,000 residents, reflecting the nation’s commitment to achieving net zero emissions by 2050.
• April 2025: The Bahrain Smart Cities Summit 2025 was inaugurated by Deputy Prime Minister Shaikh Khalid bin Abdullah Al Khalifa, focusing on sustainable urban development, government sustainability policies, innovation, and community engagement, underlining Bahrain’s dedication to smart city progress.

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