Over 65% Of Middle East Businesses Plan To Increase AI Investments, New Research Reveals
In the Middle East, artificial intelligence (AI) is rapidly becoming a cornerstone for business innovation and growth. This technological advancement is driving efficiencies, creating new opportunities, and transforming industries across the region. As companies strive to stay competitive in a global market, the integration of AI into their operations is no longer just an option but a necessity.
Deloitte, in partnership with Mohamed bin Zayed University of Artificial Intelligence, has unveiled a comprehensive report on the state and future of artificial intelligence (AI) in the Middle East. This study, titled "The 2025 State of AI in the Middle East Report," delves into both the vast prospects AI presents in the region and the hurdles organizations encounter in harnessing its full potential. It emphasizes the critical need for businesses to understand and leverage AI technology effectively.
Surveying over 150 technology and business leaders from the UAE, Saudi Arabia, and Qatar, the report, "The Perfect Storm: A perspective on unlocking AI's value in Middle East," uncovers the current landscape of AI adoption. It includes insights from in-depth interviews with industry experts, shedding light on the obstacles impeding progress and the approaches companies are employing to mitigate risks and derive maximum value from AI.
Despite a surge in AI investments across the Middle East, a significant gap exists in the foundational capabilities required to unlock its complete value. Research indicates that over 80% of organizations feel compelled to adopt AI, yet nearly half admit to lacking the necessary talent and technology for effective scaling. Nonetheless, a promising 69% of these organizations are planning to augment their AI investments in the next year.
Mutasem Dajani, CEO of Deloitte Middle East, highlights the region's commitment to AI, propelled by substantial government investments. "The GCC region is making substantial investments in AI, driven by strong government commitments. With increasing funding for AI infrastructure and a growing emphasis on developing local talent, the region is positioning itself as a global leader in AI innovation. This transformation is accelerating the shift toward knowledge-based economies, compelling organizations to fundamentally rethink their operations."
When it comes to GenAI, or Generative AI, the survey revealed significant apprehension among global leaders regarding their preparedness to tackle risk and governance issues, with 41% feeling barely or not prepared at all. This contrasts with the respondents' confidence in their technology infrastructure, talent, and strategic planning capabilities, which stood at 71%, 68%, and 69%, respectively.
Professor Sami Haddadin of MBZUAI emphasizes the importance of developing local AI expertise to bridge the readiness gap. He states, "This research highlights an increased focus on developing local AI specialists and practitioners who understand the potential of AI and how to execute implementation, while addressing concerns such as privacy and ethics. The report reveals a critical disconnect – a strong appetite among Middle Eastern organizations to deploy AI outpacing their readiness in terms of talent, strategic planning, and infrastructure."
The anticipated benefits of GenAI are considerable, with 91% of respondents believing it will significantly boost productivity. Interestingly, the region is investing heavily in GenAI, with one-third of Middle Eastern organizations allocating over 60% of their AI budget to it, a stark contrast to the global trend where 72% spend less than 40%. However, 41% of organizations view AI as a potential threat to their existing business models.
Selecting appropriate AI technologies poses a major challenge for 34% of organizations, a decision complicated by the diverse solutions available and their alignment with business goals. This difficulty is compounded by the challenge of identifying beneficial use cases for GenAI within their operations.
Yousef Barkawie, AI & Data leader at Deloitte Middle East, underscores the transformative potential of AI for businesses, urging organizations to adopt a strategic and analytical approach. "There is a myriad of ways AI can supercharge efficiency and productivity, while also paving the way for entirely new products, citizen services, and business models," he said. Barkawie calls for enhanced decision-making skills at the boardroom level to navigate the AI disruption effectively.
The report by Deloitte and MBZUAI paints a comprehensive picture of AI's current and future impact in the Middle East. It underscores the region's aggressive pursuit of AI innovation, tempered by the challenges of readiness and adoption. Through strategic investment and a focus on talent development, the Middle East is poised to become a global leader in AI, driving its transition to a knowledge-based economy.
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