Report Overview

Increasing investments in artificial intelligence (AI) systems, a rapid surge in the demand for intelligent systems, and high adoption of cloud technology are projected to propel the expansion of the GCC artificial intelligence (AI) market during the forecast period between 2023 and 2029.

GCC Artificial Intelligence (AI) Market - Industry Trends & Forecast Report, 2029

GCC artificial intelligence (AI) market size was estimated at USD 8.6 billion in 2022. During the forecast period between 2023 and 2029, the size of GCC artificial intelligence (AI) market is projected to grow at a CAGR of 11.21% reaching a value of USD 16.2 billion by 2029. Major growth drivers for the GCC artificial intelligence (AI) market include increased investments, governments’ supportive initiatives, and a strong focus on digital transformation. The market size has been expanding as AI applications penetrate various industries and sectors. Governments in the GCC region have recognized the transformative potential of AI and have launched ambitious initiatives to promote its adoption. These initiatives focus on AI research, fostering innovation, and creating a conducive regulatory environment for AI-driven technologies. The GCC countries are keen on embracing Industry 4.0 principles, which involve the integration of AI, IoT (Internet of Things), and advanced automation technologies. This integration enhances manufacturing processes, supply chain management, and overall operational efficiency. Another driving force is with the proliferation of digital technologies, massive amounts of data are being generated in the GCC region. AI thrives on data, and the availability of large datasets enables the development of more robust and accurate AI models. Also, there has been a notable increase in investments from both public and private sectors in AI startups, research centers, and AI-based solutions. This influx of funding is driving innovation and accelerating AI deployment across various sectors.

GCC Artificial Intelligence Market – Overview

The GCC artificial intelligence (AI) Market refers to the economic ecosystem and activities related to the development, deployment, and adoption of AI technologies and solutions within the Gulf Cooperation Council (GCC) region. The GCC consists of six Middle Eastern countries: Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Bahrain, and Oman. The market encompasses various aspects, including AI research, investments in AI startups and companies, governments’ supportive initiatives promoting AI adoption, AI-related products and services offered by businesses, and the integration of AI technologies into various industries and sectors. The aim is to leverage AI's capabilities to drive digital transformation, enhance operational efficiency, improve customer experiences, and address complex challenges in healthcare, finance, transportation, energy, and other industries within the GCC region.

GCC Artificial Intelligence (AI) Market

Growth Drivers

Rising Interest and Investments in AI across Middle East

Governments and enterprises in the Middle East are awakening to the transformative potential of AI and cutting-edge technologies. The region is witnessing a profound shift as AI emerges as a game-changer, driving the creation of groundbreaking services and entirely novel business paradigms. Businesses are actively reorienting their strategies to capitalize on the burgeoning demand for AI-driven solutions and services, leading to a dynamic landscape of innovation and opportunity across various sectors in the Middle East. The region's growing investments in artificial intelligence systems reflect the commitment to embrace the future of technology and harness its vast potential.

Accelerated Adoption of Cloud Technology and AI for Enhanced Business Operations

The cloud technology has emerged as a transformative approach to deliver computing services. Organizations are proactively adapting to changing consumer demands through technological advancements, innovation, and digitalization. Cloud services are playing a pivotal role in revolutionizing business operations through efficient managed services. With a focus on real-time insights, businesses are embracing cloud technologies to streamline data management and processing. The integration of AI in the cloud environment has further bolstered performance and efficiency, driving enterprise digital transformation. By harnessing AI capabilities in cloud computing, businesses are unlocking enhanced operational efficiency, strategic decision-making, and deeper insights, all while enjoying the added benefits of flexibility, agility, and cost savings.

Restraints

Cost Barrier May Hinder Growth of GCC Artificial Intelligence (AI) Market

The GCC artificial intelligence (AI) market faces a growth constraint due to the high implementation costs associated with AI solutions. Despite the region's growing interest in AI, the expenses involved in developing, integrating, and deploying AI technologies hinder widespread adoption. The initial investments required to implement AI systems, such as hardware, software, and specialized expertise, can be substantial, posing a challenge for many businesses and organizations in the GCC. Additionally, ongoing maintenance and upgrades further contribute to the overall cost of AI implementation. Addressing the cost barrier and finding cost-effective AI solutions will be crucial in unlocking the full potential of AI-driven advancements in the GCC region.

Impact of COVID-19 on GCC Artificial Intelligence (AI) Market

COVID-19 pandemic had a mixed impact on the GCC artificial intelligence (AI) market. On the one hand, it accelerated the adoption of AI technologies in healthcare for diagnostics, drug discovery, and patient care. AI-powered chatbots also played a crucial role in providing information and support during the crisis. On the other hand, the pandemic disrupted supply chains, leading to a temporary slowdown in AI investments in non-essential sectors. However, the crisis highlighted AI's potential in addressing challenges, driving the region's focus towards AI-driven solutions for resilience and digital transformation. Post-pandemic, the GCC AI market rebounded and continued its growth trajectory.

GCC Artificial Intelligence (AI) Market

Segmental Coverage

GCC Artificial Intelligence (AI) Market – By Solution

By solution, the GCC artificial intelligence (AI) market is divided into Hardware, Software, and Services segments. The software segment held the highest market share in 2022 by solution due to remarkable advancements in information storage capacity, robust computing power, and parallel processing capabilities, enabling the delivery of high-end services. The ability to extract data, offer real-time insights, and support decision-making has positioned the software segment at the forefront of market dominance. AI software solutions encompass a wide range of libraries designed to develop and implement AI applications, including primitives, linear algebra, inference, sparse matrices, video analytics, and various hardware communication capabilities. The growing need for enterprises to comprehend and analyze visual content to gain meaningful insights is expected to drive the adoption of AI software in the forecast period. To optimize operational costs and drive higher profits, businesses are increasingly embracing AI services. Artificial Intelligence as a Service (AIaaS) has become a crucial tool for companies seeking a competitive edge through cloud-based AI capabilities. AI services encompass installation, integration, maintenance, and support tasks, and this segment is projected to witness significant growth in the coming years. Within AI hardware, chipsets like GPUs (Graphics Processing Units), CPUs, application-specific integrated circuits (ASICs), and field-programmable gate arrays (FPGAs) play a pivotal role. Presently, GPUs and CPUs dominate the AI hardware market due to their unparalleled computing capabilities, which are essential for AI frameworks.

GCC Artificial Intelligence (AI) Market – By Technology

Based on technology, the GCC artificial intelligence (AI) market is divided into Deep Learning (DL), Machine Learning (ML), Natural Language Processing (NLP), and Machine Vision segments. The deep learning (DL) segment held the highest share in the GCC artificial intelligence market in 2022, due to its ability to process large and complex datasets, enabling accurate pattern recognition and delivering sophisticated AI applications with exceptional precision and efficiency. The machine learning (ML) segment holds the second highest share in the GCC artificial intelligence (AI) market due to its versatility in training models on vast data sets, empowering businesses with effective predictive and analytical capabilities for enhanced decision-making and problem-solving. Also, the natural language processing (NLP) segment is expected to witness fastest growth rate during the forecast period. This is attributed to its ability to understand, interpret, and generate human language. As the region embraces digital transformation and AI-driven applications, NLP enables seamless interactions between humans and machines, enhancing customer experiences, automating tasks, and extracting valuable insights from textual data. The increasing demand for chatbots, voice assistants, sentiment analysis, and language translation services across various sectors is propelling the adoption of NLP technologies in the GCC region.

GCC Artificial Intelligence (AI) Market – By End Use

On the basis of end use, the GCC artificial intelligence (AI) market is divided into Healthcare, BFSI, Law, Retail, and Advertising & Media segments. The advertising & media segment holds the highest share in the GCC artificial intelligence (AI) market by end use due to AI's transformative impact on the industry. AI-powered technologies enable targeted advertising, personalized content recommendations, and precise audience analysis, optimizing marketing strategies for better engagement and conversion rates. Automated content generation, sentiment analysis, and image recognition further enhance media operations, streamlining workflows and improving content relevance. Additionally, AI-driven data analytics provide valuable insights into consumer behavior and preferences, empowering advertisers and media companies to tailor campaigns and offerings. The segment's significant growth is fueled by the region's increasing digitalization and the recognition of AI's potential in revolutionizing advertising and media practices.

GCC Artificial Intelligence (AI) Market – By Region

The in-depth research report on the GCC artificial intelligence (AI) market covers the AI market in all the six GCC countries: Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman. Saudi Arabia dominates the GCC artificial intelligence (AI) market due to its proactive approach in fostering AI adoption. The country has invested heavily in AI research, development, and initiatives, aligning with its Vision 2030 goals. The government’s support, strategic partnerships with global AI leaders, and a thriving ecosystem have attracted substantial investments and talent. Saudi Arabia's focus on integrating AI across sectors, including healthcare, finance, and smart cities, has propelled its AI market growth. Additionally, the country's commitment to AI education and nurturing local talent has positioned it as a regional leader, driving AI innovations and solutions across industries.

Competitive Landscape

Major players operating in the GCC artificial intelligence (AI) market include Meta, Amazon Web Services, Inc., Microsoft, Samsung Electronics Co., Ltd, IBM Corporation, Google, Baidu, Inc., Cbot, Cisco Systems, Inc., CSP Solution, Dece Software Inc., Dilenytech, Huawei Technologies Co., Ltd, Hyperlink Infosystem, and Intel Corporation. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In March 2022 - SAP SE inaugurated SAP Labs Singapore, an innovative digital hub aimed at nurturing local digital talent, fostering community engagement, and spearheading product leadership. SAP Labs Singapore marks a pioneering initiative by SAP in the Southeast Asia (SEA) region, focusing on advancing cutting-edge digital supply chain solutions, intelligent business networks, and sustainability initiatives. Notably, the hub will also facilitate the acceleration of deep technologies, including artificial intelligence (AI) and machine learning (ML). The establishment of SAP Labs Singapore is expected to strengthen SAP's presence in the region and reinforce its commitment to driving digital transformation and technological innovations.

Scope of the Report

By Solution

• Hardware

• Software

• Services

By Technology

• Deep Learning (DL)

• Machine Learning (ML)

• Natural Language Processing (NLP)

• Machine Vision

By End Use

• Healthcare

• BFSI

• Law

• Retail

• Advertising & Media

By Country

• Saudi Arabia

• UAE

• Qatar

• Bahrain

• Kuwait

• Oman