The Middle East and Africa region is set to experience the world’s fastest spending growth in artificial intelligence (AI), with a compound annual rate of 29.7% over the 2022-2026 period to reach $6.4 billion by 2026. This growth is primarily driven by the UAE and Saudi Arabia, two of the region’s most dynamic economies. The International Data Corporation (IDC) projects that spending on AI in the Middle East and Africa, including Israel, will reach $3.0 billion in 2023, accounting for just 2.0% of the global total of $151.4 billion.
The UAE is expected to spend $20 billion on technology, including IT, AI, robotics, and blockchain, over the next three years, as it seeks to double the contribution of its digital economy to GDP from 9.7% to 19.4% within a decade. According to Manish Ranjan, senior program manager for software, cloud, and IT services at IDC MEA, the rapid adoption of cloud and digital transformation in the region will result in AI being integrated into various products and solutions. Organizations across the region are investing in AI technologies, related software, and services to enhance automation, efficiency, and agility in their operations. The pandemic has further fueled spending on AI and machine learning adoption, especially in the banking and finance, manufacturing, trade, healthcare, and government sectors.
PwC projects that AI is expected to contribute $320 billion, or 2.0% of the total global benefits of AI, to the Middle East’s economy in 2030, which is estimated at $15.7 trillion. The largest gains are expected to accrue to Saudi Arabia, where AI is projected to contribute over $135.2 billion to the economy in 2030, equivalent to 12.4% of GDP. The UAE is expected to see the largest impact of close to 14% of 2030 GDP, according to PwC.
The IDC’s Worldwide Artificial Intelligence Spending Guide indicates that banking, retail, and federal/central government will be the biggest spenders on AI in the MEA region in 2023, followed by discrete manufacturing. However, professional services and transportation are expected to be the fastest-growing industries over the five-year forecast periods, with respective compound annual growth rates of 36.4% and 33.9%.
In conclusion, AI growth in the Middle East and Africa looks promising as businesses increasingly invest in AI- and analytics-based solutions to strengthen and expand their customer experiences, build digital capabilities, and drive innovation.
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