By adopting and leveraging generative artificial intelligence (GenAI), Saudi Arabia’s technology sector could see an increase in operating profit of $4 billion by 2028.

This projection comes from global consulting firm, Strategy& Middle East, which indicates that a 15% margin growth is achievable if technology companies develop and commercialize new GenAI applications and meet the demand for advanced hardware and infrastructure.

Hani Zein, partner with Strategy& Middle East, said, “Advancements in GenAI are expected to impact all sectors in Saudi Arabia. Our analysis indicates that the telecom, media, entertainment, and technology sectors could achieve the highest potential margin upside by adopting GenAI.” 

“This presents a prime opportunity for companies to reassess their strategies and explore new avenues for growth and innovation,” he added. 

The report also highlighted that GenAI will improve research and development capabilities, streamline solution design, and automate the lead-to-cash lifecycle for tech firms, potentially reducing costs by up to 30%.

“These efforts can help accelerate the development of local intellectual property and solidify Saudi Arabia’s position as a hub for national tech champions,” said Fawaz BouAlwan, a Partner at Strategy& Middle East.

“GenAI can be the essential catalyst in accelerating this transformation, creating major growth opportunities, and enhancing internal capabilities,” he added. 

Moreover, the report emphasizes GenAI’s potential to boost original Arabic content creation, hyper-personalize customer experiences, and enhance operational capabilities.

“With an advertising spending per capita of just up to SR240 in Saudi Arabia, the research also suggests there is considerable potential to monetize their customer base better,” the report said. 

Meanwhile, Ali Ghaddar, principal with Strategy& Middle East, said, “To successfully embrace GenAI, companies must adopt a value-driven approach that delivers tangible benefits beyond technological innovation.

This begins with synchronizing GenAI initiatives to business goals, performing thorough cost-benefit analysis, and driving operational readiness throughout the organization.”

Now accepting applications for Fast Company Middle East’s Most Innovative Companies. Click here to apply.