Investment Perspective of Artificial Intelligence (AI) in Saudi Arabia

In a bid to accelerate the growth of advanced technologies like artificial intelligence, Saudi Arabia’s Prime Minister and Crown Prince Mohammed bin Salman has approved the establishment of the International Center for Artificial Intelligence Research and Ethics in Riyadh.

Saudi Arabia set to be biggest gainer from artificial intelligence in Middle East by 2030. Artificial intelligence is set to contribute $135 billion to the Saudi economy in 2030, making the Kingdom the biggest beneficiary of the technology in the Middle East, according to global consultancy firm PwC.

A report from the company noted that AI could add $320 billion to the region’s economy, equivalent to 11 percent of gross domestic product. Deputy Minister of Technology, Industry and Digital Capabilities, Dr Ahmed Al Theneyan, has said the Government’s aim is to train around 20,000 students and create 20,000 jobs, while doubling the participation of women in the ICT field.  At the same time, the Ministry of Education is introducing digital skills such as AI, data science, and data security into K-12 education to meet future needs.

Vision 2030 makes it clear that Saudi Arabia wants to accelerate its development of AI through partnerships with leading companies.  The most recent of these partnership agreements with Huawei, International Telecommunication Union (ITU) and Alibaba Cloud respectively, were announced at the 2022 Global AI Summit in Riyadh.

Amid the government’s massive push for digitization and future technology, Saudi Arabia will see AI’s contribution to GDP rise to 12.4 percent in 2030. In terms of average annual growth in the contribution of AI by region, Saudi Arabia is expected to slice off a 31.3 percent share in the technology’s expansion between 2018 to 2030, the PwC report noted.

It commended the contribution of the Kingdom to international efforts to confront the effects of climate change and reduce emissions by diversifying the energy mix used and promoting the use of clean technologies, including for renewable energy and hydrocarbons, as well as its determination to continue to lead in the production and export of clean hydrogen.

The Cabinet was briefed on the recent talks Custodian of the Two Holy Mosques King Salman and the Crown Prince and Prime Minister held with several state leaders in a bid to enhance communication and consultation between the Kingdom and other countries, and to support coordination at all levels, including multilateral action. The Cabinet praised the outcomes of the 18th Consultative Meeting of the Gulf Cooperation Council (GCC) and the GCC-Central Asia Summit, held under the Kingdom’s presidency, which are expected to have a great impact and strengthen joint Gulf action, consolidate relations among the countries of the two regions in various fields, achieve regional and international security and stability, and support collective efforts to face global challenges.

In a statement to the Saudi Press Agency (SPA) following the Cabinet session, Minister of Industry and Mineral Resources and Acting Minister of Media Bandar Al-Khorayef said that the Cabinet reviewed the Kingdom’s recent participation in the UN High-Level Political Forum 2023, which highlighted the Kingdom’s progress regarding the Sustainable Development Goals (SDGs), in line with Vision 2030, particularly human development, health care, diversification of economy, and achievements and projects aiming to build a prosperous and sustainable future for the Kingdom. Saudi’s Vision 2030 and National Transformation Program 2020 identify digital transformation as a key goal to activate economic sectors, to support industries and private sector entities, to advocate for the development of public-private business models and to ultimately reduce the country’s dependence on oil revenues through a diversification of the economy.

It also reviewed the latest international developments, including the repeated acts against Islam in Sweden and Denmark, reiterating the Kingdom’s strong condemnation of these disgraceful actions, which are a flagrant violation of all laws and customs, and contravene international efforts to spread tolerance and moderation, and reject hatred. The Cabinet also touched on the outcomes of the International Conference on Development and Migration, held in Rome, where the Kingdom reaffirmed its support for UN efforts to address security and development challenges, and called on the international community to work together in tackling these issues.

Why Investment in artificial intelligence (AI) is important in the Kingdom?

Artificial intelligence has grown massively in the past few years, thanks to cheaper and more powerful processors. There is not a day that goes by without news regarding new breakthroughs in AI. Saudi PIF’s SCAI to invest $776m to boost AI in Kingdom. KSA look forward to working closely to provide world-class AI solutions that will contribute to the success of diverse smart city, business intelligence, health care, and education initiatives in the Kingdom and beyond. Amid the government’s massive push for digitization and future technology, Saudi Arabia will see AI’s contribution to GDP rise to 12.4 percent in 2030.

In terms of average annual growth in the contribution of AI by region, Saudi Arabia is expected to slice off a 31.3 percent share in the technology’s expansion between 2018 to 2030.

End-to-end efficiency: AI eliminates friction and improves analytics and resource utilization across your organization, resulting in significant cost reductions. It can also automate complex processes and minimize downtime by predicting maintenance needs.

Improved accuracy and decision-making: AI augments human intelligence with rich analytics and pattern prediction capabilities to improve the quality, effectiveness, and creativity of employee decisions.

Intelligent offerings: Because machines think differently from humans, they can uncover gaps and opportunities in the market more quickly, helping you introduce new products, services, channels and business models with a level of speed and quality that wasn’t possible before.

Empowered employees: AI can tackle mundane activities while employees spend time on more fulfilling high-value tasks. By fundamentally changing the way work is done and reinforcing the role of people to drive growth, AI is projected to boost labor productivity. Using AI can also unlock the incredible potential of talent with disabilities, while helping all workers thrive.

Superior customer service: Continuous machine learning provides a steady flow of 360-degree customer insights for hyper personalization. From 24/7 chatbots to faster help desk routing, businesses can use AI to curate information in real time and provide high-touch experiences that drive growth, retention and overall satisfaction.

AI is used in many ways, but the prevailing truth is that your AI strategy is your business strategy. To maximize your return on AI investments, identify your business priorities and then determine how AI can help.

Identify your business priorities and then determine how AI can help.

An investment future of AI

AI Built to Scale, 84 percent of business executives believe they need to use AI to achieve their growth objectives. However, 76 percent acknowledge struggling with how to scale AI across their business. Until now, there hasn’t been a blueprint to getting past proof of concept into production and scale, a transition many struggles to make. At this inflection point, it’s imperative businesses take the necessary steps to scale successfully. The operating environment for investment management firms continues to evolve, with technological innovations and shifting investor preferences at the heart of this change. While traditional sources of differentiation in investment management are becoming increasingly commoditized, Artificial Intelligence (AI) is providing new opportunities which extend beyond cost reduction and efficient operations.

Establish governance and ethical frameworks

Organizations must design their AI strategy with trust in mind. That means building the right governance structures and making sure ethical principles are translated into the development of algorithms and software.

Bottom Line

In order to maintain momentum in the pace of technological advancement in the country, there is a need for it to attract more foreign investment which is currently constrained by the challenges in the business environment . Addressing concerns raised by the business community will allow it to attract external investment which will bring with it skills and expertise to upskill the local population. As Saudi Arabia pushes the embracement of digitization and future technologies, the Kingdom will see AI’s contribution to the gross domestic product rise to 12.4 percent in 2030.

Saudi Arabia is leapfrogging in the advanced technology sector, aligning with the goals outlined in Vision 2030. The government has initiated various measures to ensure that the Kingdom provides a safe online environment. Earlier in June, according to a royal decree issued by King Salman, the Kingdom established the Global Cybersecurity Forum Institute in Riyadh to harness the potential of cyberspace and support efforts to boost cyber safety on a global scale.  Investment in AI in Saudi Arabia is supported by the government and is currently largely driven through domestic sources, in particular the Kingdom’s sovereign wealth fund.

According to a report published in the SPA, the institute will convene an annual global security forum where experts and decision-makers from around the world will meet and discuss ways to protect the most vulnerable in cyberspace while maximizing its benefits for everyone in the Kingdom.

Dr. Nasser Alshareef

Chair of Business Administration Department at Majmaah University

@DrNasserAlshar1