Generative AI (GenAI) is a technological breakthrough that is already changing the way businesses operate, and this transformation could significantly reshape Saudi Arabia and its journey to a digital future.
GenAI holds the potential to massively impact the operating profit across various sectors in the Kingdom as it move towards 2028. New research conducted by Strategy& Middle East revealed that the technology sector in Saudi Arabia stands to gain the most from leveraging GenAI, increasing its operating profit by up to SAR 15 billion.
The Kingdom’s telecoms market is also set to increase its operating profit by up to SAR 11 billion, while the media and entertainment sector in the country could experience an operating profit growth of up to SAR 6 billion.
Generative AI’s Cross-Sector Impact in KSA
Saudi tech companies can achieve this growth by innovating and bringing new GenAI use cases to market, whilst also catering to the rising demand for advanced hardware and infrastructure that support this technology.
In fact, in June 2024, Saudi Arabia announced a fund creation through which it is set to invest up to SAR 1 billion in semiconductor companies. Over the next five-to-six years, the fund aims to boost the number of semiconductor firms operating in Saudi Arabia, significantly transforming its economy and technological landscape.
Preparing for a GenAI-enabled society and investing in semiconductor manufacturing and research will lead the Kingdom to succesfully diversify its oil-dependent economy, foster innovation, and become a key player in the global technology supply chain.
More recently, the Ministry of Communications and Information Technology (MCIT) announced the start of the second phase of the Source Tech initiative, upon establishing more than 15 tech centers in six regions across Saudi Arabia.
The initiative, which could also be driven by GenAI, aims to maximize cooperation with the private sector to localize application and software development, outsourcing, and communication services throughout the Kingdom.
Telcos can also leverage GenAI to gain deeper insights into broadband customer behavior and improve broadband infrastructure utilization. Currently, Saudi Arabia boasts around 50% FTTH penetration. By analyzing customer behavior, telcos can also personalize campaigns, accelerating ICT adoption in SMEs, and capturing an opportunity projected to reach SAR 10 billion by 2028.
As discussed during Telecom Review’s recent GenAI webinar, this technology will further support telecom operators as they better differentiate themselves from their competition by developing highly sophisticated customer segmentations, synthesizing customer insights, and generating customized product portfolios.
Media and entertainment companies can also boost their growth by harnessing GenAI to enhance operational efficiency, create original Arabic content, and deliver better customer experiences.
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