Report: $202 Billion in Spending on Generative Artificial Intelligence by 2028

An IDC report revealed in 2024 that global investment in generative artificial intelligence is expected to witness accelerated growth, exceeding the growth rate of the artificial intelligence market as a whole. Spending on this technology is also expected to reach $202 billion (758.7 billion riyals) by 2028, representing 32% of the total global spending on artificial intelligence, estimated at $632 billion (2.4 trillion riyals). Generative AI significantly contributes to reducing operational costs by up to 30% or more, according to Deloitte estimates, due to the automation of tasks and functions. A McKinsey survey of more than 1,300 companies indicated that human resources departments benefited most from generative AI technologies in reducing costs, ranging from 10% to 37%, while supply chain departments recorded higher profit growth rates, in some cases reaching more than 6%. In the Arabian Gulf region, a 2024 McKinsey study, which included (140) government and private entities, showed that three-quarters of the participating entities use generative AI in at least one area, particularly in sales, marketing, and software engineering, given the high value these technologies bring to these sectors. The results indicated that 57% of entities allocate 5% of their digital budgets to invest in generative AI, while 50% of them have developed a clear roadmap for implementing priority use cases on a large scale. The Saudi Data and Artificial Intelligence Authority (SDAIA) has issued a specialized report titled “Generative Artificial Intelligence: Promising Prospects for a Better Future.” It highlights the accelerating global transformations in this field and reviews the most prominent economic and investment opportunities, along with the accompanying challenges and expected spending on this technology in the coming years.

The report comes amidst the unprecedented technological developments the world is witnessing, which have led to the emergence of a number of influential innovations that have changed the way business is conducted. Artificial intelligence has become an essential part of the practices of individuals, institutions, and countries alike, due to its capabilities in mimicking human intelligence and performing routine and complex tasks, from automating procedures and verifying product quality to enhancing productivity in the workplace. Generative AI refers to a group of AI technologies capable of learning patterns from massive data and generating new content in various forms, such as text, images, audio and video clips, programming code, simulations, and protein sequences. This type of AI differs from traditional AI in its ability to perform more complex and creative tasks, whereas traditional AI is limited to predictions, classification, and providing recommendations.

The study predicted that generative AI will bring about a major transformation in business and the local and global economy. These transformations depend largely on the level of adoption of these advanced technologies by institutions and governments. The study also identified a set of promising future scenarios accompanied by challenges that must be addressed consciously and efficiently. The study also revealed the acceleration of the adoption of generative artificial intelligence globally, as it is expected that (80%) of institutions will adopt solutions and technologies based on it by 2026 AD, in addition to the development of specialized models to reach (50%) by 2027 AD, and the use of robots as assistants by more than (100) million people, in light of an increasing trend among institutions towards developing strategies to test these technologies.