This week, the AI industry grappled with the economics and ethics of its own growth.
Palo Alto Networks CEO Nikesh Arora called for AI costs to fall 80% within a year and 90% within two, arguing current pricing is unsustainable for enterprise adoption, while SoftBank’s Masayoshi Son countered that annual AI spending could hit $5 trillion by 2040 and dismissed talk of a bubble. Meta rolled back a new image-generation feature days after launch, following backlash over its use of public Instagram photos without prior consent. Meanwhile, over 200 economists and researchers — including 16 Nobel laureates — issued a Stanford-backed statement urging governments to act now on guardrails for AI’s economic disruption. In the Gulf, momentum continued to build as Saudi Arabia rolled out agentic AI on its national data platform, Humain and Cohere struck a partnership to build major regional AI infrastructure, and the UAE secured relaxed US chip export rules following its cooperation during the Iran conflict.
1. Palo Alto CEO Calls for Steep AI Price Cuts
Palo Alto Networks CEO Nikesh Arora believes the next phase of enterprise AI adoption will depend on dramatically reducing the cost of using it. He noted that OpenAI’s latest improvement in token efficiency was a positive step but far from enough to make AI economically viable at enterprise scale.
He added that AI should become about 80% cheaper over the next 12 months and as much as 90% cheaper within two years to make widespread enterprise adoption sustainable.
Read more: AI Token Costs Must Drop 90% to Scale Enterprise Adoption: Palo Alto CEO
2. Meta Pulls Image Feature After Privacy Backlash
Meta withdrew an AI image-generation feature after criticism over its use of photographs from public Instagram accounts. The feature allowed people to generate and edit images using material posted by public accounts. Those accounts were included by default, requiring users to opt out rather than give prior consent.
The design prompted concerns that photographs could be used to create misleading or non-consensual digital replicas. Meta removed the feature three days after its introduction following the public backlash.
Read more: Meta Removes AI Image Feature After Instagram Privacy Backlash
3. Top Economists Call for Urgent Action to Prepare for AI’s Economic Fallout
Hundreds of AI experts have demanded that policymakers and technology leaders “must act now” to prepare for the economic disruption caused by AI.
In a statement organized by Stanford University’s digital economy lab, over 200 economists and AI researchers—including 16 Nobel laureates—termed AI “larger than the Industrial Revolution,” warning it could bring risks like large-scale job displacement alongside opportunities such as major gains in living standards.
The statement predicts AI may become “radically more powerful” over the next decade and calls on governments and industry to build “incentives, guardrails, and institutions” to ensure AI complements humans and benefits society.
Read more: Hundreds of AI Experts Urge Governments to Prepare for AI-Driven Economic Disruption
4. SoftBank’s Son Sees $5 Trillion in Annual AI Spending
Artificial intelligence could require $5 trillion in annual global investment by 2040, SoftBank Group Chairman and Chief Executive Masayoshi Son said, dismissing concerns that the sector is experiencing an investment bubble.
Speaking at SoftBank World in Tokyo on Tuesday, July 14, Son described an AI-driven economy in which spending on data centers, semiconductors, electricity, networks, and robotics would rise in proportion to the technology’s contribution to global output. “If AI revenue makes up 20% of global gross domestic product by 2040, spending $5 trillion a year is a rounding error,” Son said.
Son also estimated that AI data centers could eventually require about 3 terawatts of electricity, forcing governments and companies to substantially expand global power-generation capacity.
5. Saudi Arabia Adds Agentic AI to Its National Data Platform
Saudi Arabia is integrating agentic AI into one of its core public data platforms to facilitate AI-based analysis in the public sector.
The Ministry of Economy and Planning has introduced the beta version of INSAIGHTS, an agentic AI feature within the Data Saudi Platform. This allows users to query national economic and social datasets using natural language and obtain immediate analytics, insights, and data-driven answers.
The Data Saudi Platform serves as the Kingdom’s central repository for economic and social information.
Read more: Saudi Arabia Adds Agentic AI to Its National Data Platform
6. AI Vendor Lock-In Emerges as the Next Enterprise Risk in the UAE: IBM Study
Research from the IBM Institute for Business Value finds that most organizations have become deeply dependent on their AI vendors, creating operational, regulatory, and strategic risks that are increasingly difficult to manage as AI becomes embedded across core business functions.
The study, The Calculus of AI Sovereignty, surveyed 1,000 senior executives globally, including respondents from the UAE, and found that AI sovereignty is an emerging business priority.
The findings reveal that enterprises are building increasingly sophisticated AI environments while simultaneously losing flexibility.
Read more: AI Vendor Lock-In Emerges as the Next Enterprise Risk in the UAE: IBM Study
7. US Relaxes AI Chip Curbs for UAE Following Support in Iran Conflict
UAE has secured broader access to advanced US AI chips following a shift in Washington’s export control policy, marking a pivotal moment at the intersection of geopolitics, national security, and AI infrastructure.
Under a rule change, the UAE will now be treated similarly to countries such as India, South Korea, and several European allies when purchasing sensitive technologies with potential military applications. The policy shift follows months of closer security cooperation between the UAE and the United States during the Iran conflict.
Read more: US Relaxes AI Chip Curbs for UAE Following Support in Iran Conflict
8. Humain and Cohere join forces on AI infrastructure
Saudi artificial intelligence company Humain and Canada’s Cohere have announced a strategic partnership to build one of the region’s largest dedicated AI infrastructure deployments and develop enterprise and sovereign AI models.
The deployment is expected to go live by the fourth quarter of 2027, combining Humain’s rapidly expanding AI infrastructure platform with Cohere’s expertise in frontier model development.
Humain will allocate at least 50 megawatts of dedicated AI computing capacity to support Cohere’s next-generation models. The deployment is expected to scale over the next five years.