Egypt’s AI Deal Count Just Jumped 88% – Is North Africa Finally Getting Its Moment?

Here’s a stat that tells two stories at once: Egypt’s AI deal count jumped 88% year-on-year in 2025, and pre-seed and seed AI deals across North Africa rose 56%. That’s real progress – a clear sign that early-stage investors are backing AI experiments built in local languages and markets. At the same time, the UAE and Saudi Arabia still captured 87% of all MENA AI funding in the same year. North Africa is moving – and the gap to close is well understood.

MENA AI funding reached approximately $858 million in 2025, roughly double the previous year. Egypt alone recorded around $73 million across 15 AI-related deals – the deal counts are rising. The next challenge is building out the full funding stack – Series A-plus investors writing larger cheques, Gulf and European backers syndicating into North African rounds, and the kind of follow-on capital that turns a strong early-stage pipeline into scaled, category-defining companies.

Africa still receives a very small share of global AI funding, which is precisely why North Africa’s deal count surge stands out: even modest absolute gains represent a meaningful shift in where early-stage AI capital is flowing.

Deal Count Versus Capital: Why The Distinction Matters

Rising deal counts indicate that investors are willing to back AI pilots and vertical applications built in local markets, lower the bar for pre-seed and seed fundraising and validate product-market fit experiments – all genuinely positive developments for a region that has historically watched Gulf capital flow past it. Cairo and other major cities are producing more AI-first teams building in Arabic and French NLP, logistics, healthcare and enterprise automation. That’s the pipeline being built right now.

The early-stage momentum is also creating a window for founders who move now. Sector-specific AI built with strong unit economics and early revenue from local corporates – telecoms, banks, healthcare providers – offers the clearest path to the larger Gulf and European rounds. Getting there early, before the category is crowded, is the advantage that’s available right now.

To understand where this momentum is heading next, three experts working closely with the region’s emerging AI ecosystem shared their perspectives on where the biggest opportunities, and challenges, are likely to emerge.

Our Experts

• Jawad Abbassi: Head of MENA, GSMA
• Andries Smit: Chief Growth Businesses Officer, inDrive
• Dr Adeyinka Adewale: Director, Africa Research Centre at Henley Business School

Jawad Abbassi, Head of MENA, GSMA

“North Africa’s AI momentum is real but sustaining it will require progress across infrastructure, policy, investment and ecosystem development moving together.

“Infrastructure is a critical starting point. This is not only about data centres, but also ensuring startups and developers have access to the connectivity, cloud, compute and edge capabilities needed to build and scale solutions locally.

“Policy and regulatory clarity will also play a major role. Governments are increasingly recognising the importance of creating forward-looking frameworks around AI governance, data and cross-border innovation. Earlier this year, for example, we partnered with UNDP Egypt on a regional AI governance training programme in Cairo for policymakers and regulators from across the region. Initiatives like this help strengthen the foundations for long-term AI growth.

“Investment appetite is clearly growing, particularly at pre-seed and seed stage, but continued momentum will depend on stronger follow-on funding pathways and greater confidence in scaling North African startups over the long term.

“Finally, ecosystem collaboration will be essential. Through platforms such as MWC Kigali and MWC Doha, we continue to see growing engagement between operators, startups, investors and policymakers focused on advancing AI and digital innovation across the region. The opportunity for North Africa is significant if these partnerships continue to deepen alongside investment in talent and digital infrastructure.”

Andries Smit, Chief Growth Businesses Officer, inDrive

“North Africa is shifting from ‘outsourcing back-office’ to becoming one of the continent’s most interesting AI testbeds, thanks to strong engineering hubs and large customer contact centres where AI is already driving efficiency in customer service and operations. The region’s real strategic asset is its multilingual reality: Arabic, French, English, local dialects and code-switching make it a perfect lab for training differentiated chatbots, support agents and voice products instead of just consuming generic global models.

“From our vantage point at inDrive, operating across emerging markets with an in-house VC arm, North Africa now looks like a classic underpriced environment: deep talent, rising founder quality, but still relatively shallow capital pools. Egypt is firmly among Africa’s leading startup hubs and is deliberately investing in digital infrastructure and new tech districts to attract founders, while Tunisia and Morocco are punching above their weight in AI and deep-tech and using platforms like GITEX Africa to pull in global attention.

“But let’s not mistake a deal surge for a guaranteed victory. If North Africa wants to successfully build on this early-stage momentum, several things need to move in lockstep over the next few years: affordable data-centre and cloud capacity, clear but innovation-friendly AI and data regulation, investors who can underwrite deep-tech risk beyond seed, and a denser network of AI-literate universities, accelerators and repeat founders. If North Africa gets those right, the region will stop exporting talent and start exporting category-defining AI companies.”

Dr Adeyinka Adewale, Director, Africa Research Centre at Henley Business School

“Egypt’s recent surge in AI investment is encouraging, but it should be read as early promise rather than proof of maturity. The market is clearly developing, helped by a large talent base, state-backed digital ambitions and growing regional investor attention. However, lessons from other African tech environments show that early-stage deal flow does not automatically translate into sustainable depth. The real test will be whether Egypt can move beyond startup formation into scale, liquidity and credible exits.

“North African environments still face constraints around regulatory clarity, IP protection, talent retention with brain drain to the Gulf states, and limited cross-border scaling pathways. Sustaining momentum will require more than capital. Universities, research centres, corporates, government agencies, accelerators and founder communities must become more integrated around applied AI research, commercialisation, talent pipelines and founder support. Without this institutional depth, Egypt may produce isolated startup successes rather than a durable AI innovation system. The promise is real, but it remains provisional.”

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