NHS risks losing healthtech startups to Gulf states, warns CEO

UK health technology startups may increasingly relocate to Gulf nations unless the NHS prioritises investment in digital infrastructure, according to comments from Zaid Al-Fagih, Co-founder and Chief Executive Officer at Rhazes AI.

Al-Fagih, a former NHS doctor and clinical entrepreneur, cautioned that the UK risks becoming a net exporter of healthtech talent as regulatory and compliance burdens outpace support for deployment, following the stalling of a major NHS artificial intelligence project.

Flagship NHS project stall

This warning comes after the pause of a high-profile NHS AI pilot programme, which was halted amid concerns that patient health records for 57 million people had been accessed without adequate consent. Al-Fagih said that the incident highlighted broader structural issues within the NHS's approach to technology adoption, particularly around readiness for AI integration.

"I'm not surprised by the data compliance scandal. The NHS launched a flagship AI programme, but without building the basic infrastructure to actually support it. Startups are being pushed away, not because of bad tech, but because the system isn't ready and startups can't plug in."

Al-Fagih explained that UK healthtech startups now require larger funding rounds solely to meet regulatory and compliance requirements, which discourages growth and international competitiveness.

"British AI startups are having to raise bloated funding rounds just to stay compliant. Instead of investing in growth, they're burning money on legal advice and red tape. It's no wonder they're looking elsewhere to scale."

Comparing the UK and the Gulf

Al-Fagih described first-hand challenges in introducing Rhazes AI's clinical documentation tools to NHS GP practices and emergency departments, contrasting this with the comparatively rapid adoption in the Gulf region. He said that implementation in Doha, Qatar, was faster, less costly, and better supported by local health authorities.

The UK's healthtech sector attracted GBP £27.4 billion in investment last year, placing it among the most active hubs worldwide. However, Al-Fagih emphasised that the environment for deployment lags behind other markets.

He argued that Gulf countries such as the United Arab Emirates, Saudi Arabia, and Qatar present a more attractive option for healthtech founders, offering accessible capital, robust AI-ready infrastructure, and streamlined regulatory frameworks.

"The talent is still available in the UK, for now, but VC firms, sovereign funds, and accelerators across the Gulf are watching closely. The UK is a major producer of AI tools. But when it comes to deploying them, the Gulf is already ahead. They've got world-class hospitals, connected systems, and the will to innovate. Rachel Reeves must now put healthtech at the heart of NHS investment, or risk losing a generation of medical AI pioneers."

Urgency for digital strategy

Al-Fagih reflected on the UK's track record in artificial intelligence development but asserted that the NHS and its regulatory environment are no longer fit for purpose if the country wishes to maintain a leadership position. He pointed to the Chancellor's recent pledges to boost digital transformation in the NHS as an opportunity for change and said that 2025 should mark a turning point where the UK implements a coordinated AI strategy for healthcare.

He remarked that although the UK retains a skilled talent pool, the window for retaining global healthtech leadership is narrowing as other regions advance more quickly in practical deployment and support for emerging technologies in healthcare.