Satellites, Security and Sovereign Cash: Inside the UAE’s Space Strategy

Over the last ten years, Middle Eastern governments have significantly boosted their spending on the space industry, with budgets in the region climbing 69% from $1.4 billion in 2015 to $2.5 billion in 2025, according to a KPMG report. This upward trajectory is anticipated to persist, with expenditures expected to reach $3.2 billion by 2034—a 30% rise from 2025 levels.

The UAE, Saudi Arabia, Qatar, and Oman are seen as the driving forces behind the region's burgeoning space sector, reshaping the GCC into a burgeoning hub for space innovation. Wealth funds from the Gulf, notably Saudi Arabia's Public Investment Fund (PIF) and the UAE's Mubadala, have made space a strategic priority, aligning with each nation's broader aspirations for the field.

Beyond the allure of commercial gains, recent regional conflicts have highlighted the strategic importance of space-based capabilities, especially as Gulf states strive to bolster their resilience and mitigate vulnerabilities in essential infrastructure. Mohammed Soliman, a senior fellow at the Middle East Institute, noted that the Iran conflict demonstrated how data centers and radar installations can be disrupted or weakened, while satellites often remain operational and on station.

"That lesson will shape how the Gulf states perceive the nexus between space and national security," Soliman stated. Consequently, the Gulf's investment in space infrastructure is viewed as a natural progression.

The UAE's space sector is shifting from a government-led exploration program to a more diverse commercial ecosystem centered on Earth-observation, communications, and deep-space exploration. At the forefront of this transformation is Abu Dhabi-based satellite operator Space42, which has been augmenting the UAE's Earth-observation capabilities recently.

Space42 recently inked a binding agreement with U.S. communications firm Viasat to establish Equatys, a shared platform designed to connect smartphones and other devices directly to satellites. The venture, backed by up to $1 billion in equity from both parties, aims to make satellite connectivity economically competitive with terrestrial networks through a model that has proven successful in the mobile industry.

Equatys will operate a shared satellite and ground network initially featuring fewer than 200 satellites, with plans to scale up to 2,800 units. The platform seeks to reduce costs, expedite deployment, and significantly enhance coverage.

Anna Hazlett, founder and CEO of UAE investment and advisory firm AzurX, emphasized the economic benefits of aggregation. She explained that by pooling operators, spectrum, and demand onto a single platform, there should be a compounding economic advantage as the constellation grows. Since 2021, AzurX has provided strategic advisory services in the Middle East to Blue Origin, Jeff Bezos' space technology company.

According to Hazlett, "Each participant bears less of the infrastructure burden while potentially gaining better coverage, performance, and availability. It's a far cry from every operator having to finance and build its own constellation."

Satellite connectivity is emerging as a focal point for commercial interest in the UAE. In July, Space42 and Skylo, a California-based satellite communications company, successfully tested direct-to-device SMS and emergency SOS services on Android smartphones in the UAE. In June, Space42 expanded its Foresight constellation by adding three new synthetic-aperture-radar (SAR) satellites, developed in partnership with Finland's ICEYE, a microsatellite manufacturer and operator.

These satellites can image the Earth day or night and through cloud cover, integrating the technology at Space42's facility in Abu Dhabi. This move underscores the UAE's strategy of merging international expertise with its growing domestic capabilities in the space sector. The imagery feeds into Space42's GIQ geospatial intelligence platform, which utilizes AI to transform raw satellite data into usable intelligence within minutes.

The platform promises to cut emergency response times by up to 90%, a capability particularly pertinent during the ongoing Iran-U.S. conflict. Hazlett highlighted that the last six months have underscored the critical role of space-based infrastructure, particularly concerning persistent monitoring, Earth observation, geospatial intelligence, secure communications, and resilient architectures.

"What I am seeing is less tolerance for very long development and procurement cycles," she noted, stressing the growing urgency to identify capability gaps, assess commercially available options, and swiftly operationalize capabilities. As such, satellites are transitioning from primarily scientific and commercial tools for the UAE into integral components of its national infrastructure and security architecture.

In this context, domestic funding for the UAE's space program is on the rise. In a recent development, Abu Dhabi conglomerate International Holding Company (IHC), the emirate's largest listed firm, announced plans to expand into the space sector. Its subsidiary, International Tech Group, acquired an 80% stake in UAE-based Marlan Holding, which owns Marlan Space, a business investing in space technologies.

In August, Marlan Space entered a joint venture with US-based Loft Orbital to develop commercial low Earth orbit satellites, with the $100 million project aimed at advancing commercial low Earth orbit satellite development.