AI Adoption in the Middle East: Scaling Ambitions, Strategic Investments

AI adoption in the Middle East is gaining significant momentum, with countries like the UAE, Saudi Arabia, and Qatar at the forefront of this technological transformation. These nations are investing heavily in advanced technologies and infrastructure to support the growth of artificial intelligence. While many organizations within the region are still in the early stages of implementation, the interest and commitment to integrating AI across various sectors are visibly increasing.

Current Landscape of AI adoption in Middle East

Across the region, AI adoption is most prominent in operations, IT/digital functions, and strategic planning. In the UAE, 34% of organizations have implemented AI at scale in IT/digital functions, 32% in strategy, and 29% in operations. Qatar showcases similar trends, with 31% in operations, 29% in IT/digital, and 27% in both product development and supply chain/manufacturing. Saudi Arabia focuses on strategy (27%), operations (25%), and product development (25%).

Despite these advancements, many organizations remain in the 'proof of concept' phase, cautiously recognizing AI's value while working on foundational strategies for broader implementation.

The leading use cases for AI tools in the region include content generation and summarization. The UAE prioritizes content generation, Qatar emphasizes coding, and Saudi Arabia focuses on content summarization. These variations reflect the diverse strategic priorities and digital maturity levels across the Gulf Cooperation Council (GCC) countries.

Strategic Investments and National Initiatives

Governments in the Middle East are making substantial investments to bolster AI capabilities. The UAE has launched a US $100 billion AI-focused investment fund, MGX, and appointed chief AI officers across federal entities to drive AI integration. Saudi Arabia's Public Investment Fund (PIF) has partnered with Google Cloud to establish a data center equipped with advanced AI processing units, aiming to position the kingdom as a global AI hub.

Qatar is also making significant strides, with its telecom company Ooredoo investing US $550 million to expand its AI data center capabilities, aiming to meet the growing demand for AI applications in the region.

While the momentum is evident, challenges persist. Organizations face hurdles such as developing clear AI strategies, building talent pools, and establishing robust data infrastructures. According to McKinsey[1], only 30% of companies in the GCC have a clearly defined AI strategy, and just 35% possess the necessary technology infrastructure to support AI initiatives.

Future Outlook for AI in the Middle East

The Middle East is on a transformative journey toward AI implementation, marked by strategic investments and national initiatives. While AI adoption in Middle East is still in the early stages, the commitment to integrating AI across various sectors signals a promising future. By addressing existing challenges and leveraging strategic collaborations, the Middle East is poised to become a significant player in the global AI landscape.

[1] McKinsey: The state of AI in GCC countries—and how to overcome adoption challenges..