Europe and the UK are moving in a structurally different direction to the GCC, and founders need to understand three distinct pressures that are building simultaneously.

Export Controls
Both the EU and UK have recently updated the lists of technologies that require a government licence before they can be transferred to certain foreign entities or jurisdictions. AI-enabled sensing, autonomous software, and electronic warfare-adjacent technologies have all been added or reclassified. A founder cannot simply sell or deploy technology in the GCC without first establishing whether a licence is required — that process takes time and can be refused.

Foreign Investment Screening
The UK’s National Security and Investment Act and equivalent EU member state regimes now scrutinise inbound investment from certain geographies into sensitive technology companies. If a GCC sovereign fund wants to take a significant stake in a UK-based dual-use venture, that transaction may require government approval and could be blocked or have conditions attached. Founders need to understand this before structuring a funding round that includes GCC institutional capital.

Technology Sovereignty
A set of policies across the EU and UK is designed to keep strategic technologies under European control — through preferential procurement, research funding with conditions attached, and pressure on companies to keep sensitive development onshore. European public sector customers and strategic partners are becoming increasingly uncomfortable if too much of a company’s development activity or ownership sits outside Europe.

What GGH Recommends for Founders
Map your exposure — identify AI-powered products and workflows where outputs reach EU customers, users, or subsidiaries
Classify your risk — flag any use that might fall into unacceptable or high-risk categories and address the riskiest cases first
Tighten your contracts — update customer and partner terms to disclose AI use and limit onward sharing of AI-generated outputs into the EU
Demand supplier transparency — require vendors to spell out embedded AI in their tools and the compliance obligations they assume

For founders with dual compliance risk, consider running operations from hubs like Dubai, which pair lighter-touch AI regulation with heavy investment in AI infrastructure and access to later-stage funding.