Region’s AI spending to grow at the fastest rate in UAE, Saudi Arabia

Region’s AI spending to grow at the fastest rate in UAE, Saudi Arabia

Artificial intelligence spending in the middle east and Africa region will grow at the fastest rate in the world between 2022 and 2026 increasing by 29.7% to $6.4 billion in 2026 driven by UAE and Saudi Arabia the region’s most dynamic economies.

In 2023, spending on AI will reach $3.0 billion in the middle east and Africa (MEA) including Israel accounting for just 2 percent of the global total of $151.4 billion.

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The UAE which is on track to double the contribution of its digital economy to GDP to 19.4% from 9.7% in 10 years is expected to invest $20 billion in technology over the next three years including IT artificial intelligence robotics and blockchain according to a recent report from Boston Consulting Group.

“Cloud and digital transformation are causing a rapid adoption of AI in MEA,” said Manish Ranjan IDC MEA’s senior program manager for software, cloud, and IT services.

A number of businesses in the region are investing in Artificial Intelligence technologies as well as software and services related to them in an effort to gain greater efficiency through automation and to become more agile in their operations. Particularly in the banking and finance, manufacturing, trade, health care, and government verticals the effects of the pandemic have fueled further spending in relation to AI/ML adoption.

According to PwC, the middle east is projected to benefit from artificial intelligence by $320 billion or 2.0 percent of the total global benefit estimated at $15.7 trillion in 2030.

AI is expected to contribute more than $135.2 billion to Saudi Arabia’s economy by 2030 or 12.4% of GDP. According to PwC, the UAE will see the largest impact of close to 14 percent of the 2030 GDP.

According to IDC’s AI spending guide for 2023, the banking, retail, and federal/central government sectors will spend the most on AI. Over the next five years, IDC forecasts professional services and transportation to grow at CAGR’ of 36.4% and 33.9% respectively.

As businesses are increasingly investing in AI and analytics and business intelligence (ABI) based solutions in order to strengthen and expand their customer’s experiences, build digital capabilities and drive innovation said that the growth of AI in the region looks very promising.

Several challenges will accompany the region’s increasing adoption of AI including a lack of skilled data scientists, engineers, and AI modelers. As a result, the region has multiple initiatives in place to upskill local talent with organizations both in the public and private sectors establishing partnerships to foster AI and ML-specific learning.

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