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Generative AI to contribute $35 billion annually to GCC economies
75% of businesses reported using genAI in at least one area, while 57% of GCC companies allocate over 5% of their digital budgets to AI.
GCC nations are leading the charge in adopting generative artificial intelligence (genAI), according to a new McKinsey report.
The region is poised to reap significant economic benefits, with genAI potentially contributing up to $35 billion annually to GCC economies, accounting for around 2.3% of the region’s GDP. This would be in addition to the $150 billion expected from other AI technologies.
The report highlights that the GCC has a higher adoption rate of genAI compared to global standards. Among surveyed businesses in the region, 75% reported implementing genAI in at least one area of their operations, compared to 65% globally.
Additionally, 57% of GCC companies said they allocate at least 5% of their digital budgets to AI, significantly higher than the global average of 33%.
McKinsey associate partner Karan Soni described artificial general intelligence (AGI) as the “next frontier” in AI development.
While genAI mimics human abilities, AGI would replicate and surpass human intelligence by applying complex reasoning and logic. Though AGI is not yet available, genAI is already being widely used across industries.
Concerns over AI’s impact on employment persist, but Soni noted that governments are actively working to regulate AI use responsibly. He emphasized that new technologies historically lead to job creation rather than job losses, citing previous technological shifts like the Industrial Revolution and the internet.
“New technology frontiers end up creating more job opportunities. It comes at the cost of having to retrain and reskill people,” Soni stated. “But based on all evidence from the past, the fear might be overstated.”
Soni also pointed out that while much AI research and development occurs in the Western world, GCC governments are driving AI adoption across the region.
Both the UAE and Saudi Arabia have introduced strong data management and sovereignty laws. The UAE, for instance, has invested in data centers to address data sovereignty issues early on.
In Saudi Arabia, the government has focused on keeping sensitive data, such as that related to oil and gas assets, within the country.
Amazon and Microsoft’s recent announcements to establish data centers in the kingdom reflect the government’s efforts to address data management concerns.
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