In recent years, the United Arab Emirates (UAE) has been making significant strides towards becoming a leader in AI initiatives and investments, but now other Gulf states like Saudi Arabia and Qatar are also getting serious about their AI ambitions. With the potential for AI to contribute $320 billion to the Middle East by 2030, Gulf countries are positioning themselves to harness the benefits of this rapidly advancing technology.
According to a report from PwC, AI could account for about 2% of the total global benefits by 2030. “Huge investments is going into AI in the Middle East,” said Stephen Anderson, Middle East strategy and markets leader at PwC, during last week’s Global AI Summit (GAIN) in Riyadh, Saudi Arabia.
Anderson highlighted that Gulf states' AI investment strategies are more experimental and proactive than in other regions. However, the rapid growth of AI comes with significant challenges, such as the massive energy demands required to power AI technologies. AI sustainability in Gulf countries is increasingly becoming a concern, as AI, data centres, and cryptocurrencies are major sources of greenhouse gas emissions.
Google recently reported that its emissions in 2023 were nearly 50% higher than in 2019, with AI being a key contributor. By 2026, AI energy demands in the Gulf could double, according to the International Energy Agency.
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Despite these challenges, Anderson believes the Gulf region is uniquely positioned to make AI more sustainable. The Gulf countries, especially Saudi Arabia and the UAE, are major producers of both fossil fuels and renewable energy. “This is the lowest-cost place anywhere in the world to produce solar energy,” Anderson said. This offers a unique opportunity for AI sustainability in Gulf countries, where AI technologies can be powered by renewable sources like solar energy.
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Saudi Arabia, as part of its Vision 2030 AI goals, is heavily investing in AI to diversify its economy away from oil and gas. According to the Saudi Data and AI Authority (SDAIA), AI is projected to contribute 12% of Saudi Arabia’s GDP by 2030, with the sector growing at an annual rate of 29%. AI is set to become a key driver in Saudi Arabia’s economic transformation.
One of the significant AI initiatives in the region is the development of Arabic-language AI models. Both Saudi Arabia and the UAE are working on AI models that capture the nuances of the Arabic language, which have been largely missing from global platforms like ChatGPT. The UAE's Jais AI tool and Saudi Arabia’s ALLaM Arabic chatbot are two notable developments in this space.
Last week, it was announced that ALLaM will be hosted on Microsoft’s Azure cloud computing platform. This follows the news that it will also be accessible via IBM’s watsonx platform, underscoring Saudi Arabia’s commitment to competing with English-language AI markets. Saudi AI hub development initiatives are also focusing on government and corporate applications, driving innovation across multiple sectors.
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As AI technologies continue to grow, the challenge of AI governance and regulations in the Middle East becomes more pronounced. During the Global AI Summit, the Saudi Data and AI Authority introduced guidelines on the responsible use of technologies like deep fakes. Saudi Arabia also launched the Riyadh Charter for AI in the Islamic World, which establishes a framework for AI governance in line with Islamic principles. According to Nick Studer, CEO at Oliver Wyman Group, “A solid regulatory framework is essential for the future of AI.” He emphasized that concerns about privacy, job loss, and even national sovereignty require sensible regulation as the region’s reliance on AI-driven corporate applications grows.
With heavy investments in AI, a focus on Arabic-language AI models, and a commitment to sustainable energy solutions, Gulf states like Saudi Arabia and the UAE are well on their way to becoming global AI superpowers. As the AI-driven economic diversification in the Gulf progresses, the region is poised to play a pivotal role in shaping the future of AI on a global scale.
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