North Africa rises on deals as MENA AI funding hits $858 million

Conversations around artificial intelligence (AI) have moved beyond whether the technology matters to how quickly it can be developed and scaled. In 2025, this shift was reflected in venture capital data across the Middle East and North Africa. 

The region’s AI sector attracted $858 million in funding in 2025, accounting for 22% of total venture capital deployed across MENA  and nearly double the amount recorded the previous year, according to the 2025 State of Venture Capital of AI in MENA report by MAGNiTT, a venture capital data platform. 

The 2025 figures mark a transition in how artificial intelligence has become embedded in venture capital activity across the region. They also reveal a growing gap between where AI capital is being deployed and where startup activity is emerging, as funding concentrates in specific markets even while venture activity spreads more broadly. 

The funding was raised across 194 deals, accounting for 29% of all venture deals in the region. However, this surge in capital was not evenly distributed across markets. 

North Africa’s visibility in the 2025 AI venture landscape comes primarily through deal activity rather than funding volume. 

Egypt recorded $73 million across 15 AI-related deals in 2025, representing eight per cent of the regional  AI funding and an 88% year-on-year increase in deal count. In funding terms, Egypt remains well behind the region’s dominant  AI markets, led by the United Arab Emirates and Saudi Arabia, which together captured 87% of regional AI funding. 

However, the rise in deal counts signals North Africa’s growing participation in the AI sector. It indicates that more founders are building startups centred on AI applications, with rising investor interest at the early stage, as pre-seed and seed AI deals increased by 56% year-on-year.

This pattern mirrors how AI venture activity is unfolding across Africa more broadly. Data from the 2025 Africa Investment Report compiled by Briter Intelligence, a market intelligence and data platform, shows that AI-enabled companies accounted for roughly 15% of all venture deals on the continent, which collectively raised $3.6 billion across more than  600 deals.

The 2025 data positions  North Africa as an active but largely early-stage participant in the region’s AI venture capital landscape. For now, its footprint is defined more by rising activity than by capital concentration.  

This momentum is expected to accelerate as about 26% of the continent’s business leaders on the continent plan to allocate more than 20% of their investment budgets to AI over the next 12  months, nearly double the global average of 14%. 

As more companies across the continent integrate  AI into their operations and product offerings, this early-stage venture activity could translate into larger capital inflows in the years ahead.