AI is here to stay and the UAE is committed to making the most of this disruptive tech trend. Reports indicate that nearly half of companies in the UAE (44.74 percent) are currently using advanced language models in their day-to-day operations. In the UAE, data suggests that 46 percent of AI users utilize the technology primarily for retrieving information, with 33 percent using it for customer service and support, and 13 percent for personalized recommendations driven by AI. The retail sector, in particular, has seen promising results, with businesses implementing AI models to provide tailored shopping experiences based on individual customer behavior and purchase history.
Some companies in the region have taken steps to address security and privacy concerns by developing their own language models trained with data specific to compliance. These models serve as conversational bots, helping compliance officers with regulatory inquiries and increasing operational efficiency. Besides, recently, Roland Berger Middle East presented its report titled “AI across the Gulf: Moving from aspirations to tangible impact”, which includes a thorough evaluation of the adoption of artificial intelligence (AI) at the enterprise level throughout the GCC region.
Artificial Intelligence Transitions from a Goal to a Strategic Focus
Research findings indicate that in the Gulf region, AI has now become a top priority. A vast majority, around 80percent, of organizations surveyed have incorporated AI into their long-term plans, showcasing the region's rapid digital advancement.
In all six GCC nations - the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman - there has been a move towards either implementing national AI strategies or working on their development. This demonstrates the increasing importance of AI as a driving force for competitiveness, economic expansion, and the modernization of the public sector.
There is a strong sense of investment growth in AI, with 85percent of organizations expecting an increase in AI budgets by 2026, and nearly 40percent of them predicting significant growth. The focus has shifted towards Generative AI as the leading technology, as indicated by 35percent of respondents, due to its immediate impact on business, visible productivity enhancements, and ease of implementation. Simultaneously, many organizations are transitioning towards using multi-vendor AI systems to maintain a balance between flexibility, compliance, and performance.
The Challenge Lies in Scaling it Effectively
Organizations are starting to see AI as a valuable tool for driving business success, enabling quicker decision-making, improved customer experiences, new opportunities for growth, and better risk management. The top priority for AI has shifted towards enhancing customer and citizen experiences, with 46percent of respondents indicating this.
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Despite the widespread adoption of AI strategies, there is a noticeable gap in execution. Many organizations lack the necessary operational readiness, with only a third having a comprehensive data strategy in place and even fewer having the proper operating model and governance structures to scale effectively. Additionally, only 28percent have established a dedicated board for AI ethics and compliance.
Several obstacles hinder the implementation of AI, including challenges with data quality, gaps in technology readiness, limited funding for projects beyond testing phases, resistance to change, lack of collaboration between different departments, and difficulties in finding talent to integrate AI into daily operations.
The Public Sector is Progressing more Rapidly than Private Businesses
Government institutions are making faster progress compared to private companies, as more than 90 percent of them have implemented or are developing an AI strategy, in contrast to only 75percent in the private sector. National requirements and digital government initiatives are driving the adoption of AI, while private businesses struggle with issues related to talent, cooperation, and financial resources. Public sector officials are still dealing with obstacles such as merging data, outdated systems, and regulatory constraints.
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Advances around the Region
Saudi Arabia's Vision 2030 plan highlights AI as essential for diversifying its economy, which heavily depends on oil. Significant funding is directed towards advanced smart city projects and cutting-edge AI-based health care advancements.
However, underneath this appearance of advancement, there exists a noticeable concern about the sufficiency of the country's regulatory systems and the possibility of AI to exacerbate existing social inequalities. The challenge goes beyond simply implementing technology; it requires ensuring that these technological advancements are fair and advantageous for all segments of the population.
Israel, recognized for its technological expertise, thrives in AI, particularly in healthcare and cybersecurity. Israeli startups lead in AI innovation, yet this swift expansion raises concerns about sufficient oversight to tackle ethical issues, including data privacy and algorithmic bias.
In Israel, companies in the AI sector are emerging − with a few already at the forefront globally, like Pinecone and AI21 in GenAI, along with numerous others in the wider AI domain.
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Qatar is concentrating on AI education and research through projects such as the Qatar Computing Research Institute. Although these initiatives are praiseworthy, they reveal a regional problem: the disparity between research and the broad, practical implementation of AI. These innovations may stay limited to academic and research environments, lacking a real effect on society at large.