AI in GCC Countries: A New Horizon

Sam Naji, Joseph Tekriti
June 12, 2023
4 minute read
Table of Contents

The Gulf Cooperation Council (GCC) countries are massively incorporating artificial intelligence (AI) to enhance their revenue streams. According to McKinsey research, AI is expected to generate around $150 billion, equivalent to 9% or more of the combined GDP of the GCC countries. Despite notable examples of successful implementation of AI in the region, the overall adoption of AI is progressing slower than expected.  

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Graph source: Chandran, V., et al. (2023, May 30). The state of AI in GCC countries—and how to overcome adoption challenges. McKinsey & Company.

AI Adoption Across Various Sectors

Specifically, joint research by McKinsey and the GCC Board Directors Institute concluded that approximately 62% of respondents reported using AI in at least one business function. While this adoption rate is similar to North America, the region has significant potential for value creation.  

Furthermore, different sectors in the GCC countries are adopting such AI models at different rates. Retail companies have made the most progress, with around 75% of surveyed people indicating a significant AI adoption. Conversely, financial services, capital projects, and infrastructure (CP&I) have made a far slower progression utilizing and integrating AI.  

Competition, Data Availability, and the Speed of AI Integration

Competition in international markets and data availability influence the adoption speed in different industries. For example, energy and material companies have been one of the first adopters of AI to enhance their efficiency and compete globally. Retail firms with vast data use AI to gain enhanced consumer insights to optimize their operations. Industries such as construction face challenges in data collection, as they need more apt infrastructure for integrating AI.  


McKinsey research suggests that companies in the GCC countries have only "scratched the surface" of AI's potential. Only a few organizations are appropriately integrating advanced machine learning (ML) analytics and AI models. If used, such models are predominantly used in marketing and sales functions. Other sectors like manufacturing, risk management, and operations present vacant opportunities for wealth creation.  

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Image source: Chandran, V., et al. (2023, May 30). The state of AI in GCC countries—and how to overcome adoption challenges. McKinsey & Company.

Opportunities and Potential: Beyond the Surface of AI Implementation

In this regard, the most undervalued sector in the GCC, the CP&I sector, can aptly integrate AI in various ways. These include automating project development and planning, integrating intelligent supply chain management, applying enhanced risk management, and processing data analytics. These are a few ways GCC economies can benefit from applying AI in the CP&I sector.  

Key Areas to Accelerate AI Integration

So how would one approach this? Firms need to focus on four key areas to accelerate such AI integration. These include strategy, organization and talent, data and technology, as well as the factor of adoption and scaling. Companies should create and align their AI strategy with the overall enterprise strategy, securing leadership buy-in and developing a comprehensive map for such AI development and implementations. Creating the right environment, i.e., the right talent, investing in capability building, and collaborating with research (academia), would help address such challenges from the research perspective. Creating a high-quality data line, modernizing technology infrastructure, and managing data effectively are crucial for enhancing AI's use at a large scale. Moreover, integrating AI into everyday operations requires making analytics more user-friendly and improving collaboration between IT and business teams.

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Table source: Chandran, V., et al. (2023, May 30). The state of AI in GCC countries—and how to overcome adoption challenges. McKinsey & Company.

Focusing on these four points will allow companies and GCC governments to strategize, organize, scale, and build up talent. Factors of robust leadership with an organized plan followed by financially scaling costs and talent would optimize costs against AI applications for the private and public sectors.  

The Emergence of Local and International Players

Firms have begun eyeing the GCC and the Middle East as an undervalued market. Both large consulting groups like The Big Four and medium-sized firms have started expanding operations in the region. An example is Fits Consultants, which operates SaaS (Software as a Service) operations from Dubai. Local players are also emerging, such as Bayanat AI, located in Abu Dhabi, considered one of the largest AI firms outside of the U.S. in terms of market capitalization. They plan to export data-augmented AI products to the region. Public sectors are also increasingly involved, with Hamdan Bin Mohammed, the Crown Prince of Dubai, launching the so-called "Dubai Center" to integrate AI into infrastructural projects. Saudi Arabia's NSDAI (National Strategy for Data & AI) has also outlined a plan to compete internationally as a leading economy utilizing and exporting data-augmented AI. PWC expects the UAE alone to rival the U.S. regarding AI's contribution to GDP by 2030.

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Graph source: PWC. (n.d.). US$320 billion by 2030? The potential impact of Artificial Intelligence in the Middle East.

Overall, companies in the GCC have considerable work to do to integrate the benefits of AI fully. However, this is achievable considering the scale of wealth and investment in such countries. Addressing the challenges and implementing the above can help accelerate the appropriate adoption of AI, which has endless potential.  

Acknowledgment: This article was skillfully crafted with the help of Ansai R.

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