As the UAE and Saudi Arabia economies strengthen their innovation capabilities, they will grow more competitive and influential in the AI space. With only five countries categorized as AI pioneers, the two GCC countries rank among the top globally for their AI readiness.
According to a recent AI maturity index, out of 73 economies assessed, only Canada, Mainland China, Singapore, the UK, and the U.S. are categorized as AI pioneers. More than 70% scored below the halfway mark in categories like ecosystem participation, skills, and R&D.
AI Readiness within the GCC
AI is revolutionizing industries and reshaping economies, positioning itself as a cornerstone of future economic development. Its rapid implementation has made it a top priority for economies worldwide.
In September 2024, the International Telecommunication Union (ITU) launched a Standardized Readiness Framework for artificial intelligence (AI) integrations, comprising of a comprehensive set of guidelines for assessing AI adoption while driving sustainability and economic growth. The report even highlighted the UAE’s AI platform, U-Ask, which aims to transform citizen interaction in its government services.
Based on BCG’s assessment of economies for their AI readiness, the UAE and Saudi Arabia are among the top 25% and 50%, respectively. Qatar stands within the top 75% while Oman and Bahrain are among the top 90%.
As ‘Rising Contenders,’ the UAE and Saudi Arabia boast economies with relatively high exposure to Al and sufficient levels of readiness for its adoption, considering that both countries have good telecommunications and AI infrastructure as well as ecosystem partners in place.
According to industry experts, by 2031, the UAE’s private sector investment in AI is expected to reach AED 335 billion, boosting the country’s economy. In fact, AI is set to shape Dubai’s next 185 years of development, according to Omar Sultan Al Olama, UAE Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications. “AI is not a future vision; it is our reality now,” he said.
In fact, Saudi Arabia is now emerging as a global center of excellence (CoE) in fields of national priority such as Arabic-focused AI, industrial and energy-related AI, government efficiency, as well as healthcare and education. Separate 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.
Here are some of the AI initiatives within the UAE and Saudi Arabia in 2024:
- The UAE has officially established the Artificial Intelligence and Advanced Technology Council (AIATC).
- In October 2024, the UAE’s new AI policy was approved, focusing on six core principles: advancement, cooperation, community, ethics, sustainability, and security.
- The 2025 UAE National Action Plan, has been announced with a strong focus on three key areas, including accelerating AI innovations.
- A joint research project by Khalifa University's (KU) 6G Center and Abu Dhabi's Technology Innovation Institute (TII) has developed the first TelecomGPT LLM.
- Abu Dhabi intends to establish the Smart and Autonomous Systems Council (SASC) to advance a supportive and attractive environment for the development and use of smart and autonomous systems.
- Supported by the Kingdom of Saudi Arabia, the first global Generative AI Center of Excellence (GenAI CoE ) is a groundbreaking initiative spearheaded by the Digital Cooperation Organization (DCO).
- The Saudi Data and Artificial Intelligence Authority (SDAIA) has revealed ‘The State of AI in Saudi Arabia’ report, highlighting the Kingdom’s efforts and advancements in AI from 2019 to 2023.
Moreover, BCG’s geographical analysis mentioned that Qatar is already using AI applications in the oil industry to optimize production and boost sustainability, whereas Bahrain and Kuwait are yet to leverage AI in the energy sector for similar purposes, in addition to managing supply chains.
Read More: From Ambition to Action: Closing the GCC Innovation Readiness Gap
ICT: High AI Exposure Results in GDP Growth
ICT sectors, encompassing information, communication, and high-tech goods, have also shown high AI exposure. More than just hotbeds for automation, such sectors also produce AI-related goods and services that other industries use or sell.
As a result, economies with strong ICT sectors that produce AI technologies will see their GDPs grow. To cite an example, AI is expected to contribute 12% to Saudi Arabia's GDP by 2030.
Moreover, semiconductors created by an economy’s high-tech goods sector are also heavily used in autonomous driving for enhanced safety features and improved fuel efficiency. Hence, homegrown AI has the potential to disrupt an economy’s automotive sector, making it more innovative and competitive. In this way, both automakers and chip makers can anticipate further revenue growth.
