This first appeared on Finance 360
In July, Intelmatix, a Saudi-based deep tech startup, secured $20 million in a Series A funding round facilitated by Shorooq Partners, a renowned tech investment firm in the region. Intelmatix’s impressive funding round marks one of the highest funding rounds witnessed in the Middle East. However, this funding exercise was not an isolated event. In fact, it seems to
echo a brewing sentiment in the region. The Middle East is ready to transform into the epicenter for AI research and development, where essential resources meet innovation.
PwC’s 2024 business highlights outlined the growing excitement and apprehension surrounding AI in the Middle East. Industry data suggests that “governments and businesses across the Middle East are beginning to realize the shift globally towards AI and advanced technologies. They are faced with a choice between being a part of the technological disruption or being left behind. When we [PwC] look at the economic impact for the region, being left behind is not an option. We estimate that the Middle East is expected to accrue 2% of the total global benefits of AI in 2030. This is equivalent to US$320 billion.”
Governments in the Middle East are exploring unconventional growth avenues in the AI space that transcend the traditional injection of funds into the sector. Moussa Beidas, Partner, Ideation Lead at PwC Middle East, cited the “UAE Artificial Intelligence Strategy 2031, which aims to cut government costs by 50% via the application of AI and position the UAE as a global leader in artificial intelligence by 2031.”
Earlier this year, Abu Dhabi launched the Artificial Intelligence and Advanced Technology Council (AIATC) to develop and implement policies and strategies related to research, infrastructure, and investments in AI and other advanced technologies. In May 2024, the UAE announced the role of a chief executive for artificial intelligence across all UAE federal entities. By June, Dubai appointed 22 chief AI officers to key government departments, including Dubai Police, Dubai RTA, DEWA, and the Department of Tourism and Economy, to advance the use of AI in government work.
Beidas expanded on how Dubai is spearheading the AI buzz in the Middle East. “Dubai, in particular, has demonstrated its readiness for exponential change, emphasizing that AI is not eliminating jobs but rather transforming them. “The scope and acceptance of GenAI in the GCC is expected to generate $9.9 of economic growth for every $1 invested, with the overall economic impact of GenAI estimated to reach $23.5 billion per year by 2030 in the GCC,” Beidas added.
The Middle East’s efforts in developing large language models (LLMs) have received international acclaim, indicating significant advancements in its rapidly developing AI sector. The region is not only advancing technologically but is also prioritizing security and privacy, as evidenced by the growing trend towards adopting self-hosted AI models. Saudi Arabia’s
Vision 2030 was designed to champion a post-oil economy. AI and digital transformation take center stage in this national vision. The establishment of the Saudi Data and Artificial Intelligence Authority (SDAIA) and the National Strategy for Data and AI (NSDAI) reflect the Kingdom’s commitment to becoming a leader in AI by 2030. Saudi Arabia is also establishing a $40 billion fund to invest in AI, led by the Public Investment Fund and US venture capital firm Andreessen Horowitz.
Innovators and governments are gearing up to carve a post-oil future in the region through timely reforms and breakthroughs. Governments in the region are actively diverting their attention and funds from fossil fuels. AI poses as the ideal commodity to exploit for future growth and revenue. As Beidas confirms, “The development of non-oil sectors through investment in AI technologies could strategically position the region for the years to come.”
