Saudi Arabia’s technology sector is poised to increase operating profits by SR15 billion ($4 billion) by 2028 through the adoption of generative artificial intelligence (GenAI), according to a report by global consulting firm Strategy& Middle East. The report suggests a 15 percentage point margin growth is achievable if tech companies successfully develop and commercialize new GenAI use cases and meet the rising demand for advanced hardware and infrastructure.
Aligned with the Vision 2030 goals, Saudi Arabia is positioning itself as a regional technological hub, with the Saudi Data and Artificial Intelligence Authority (SDAIA), established in 2019, leading the initiative. The Kingdom will also host the third Global AI Summit in Riyadh from Sept. 10 to 12, focusing on ethical AI development and its applications across various sectors like transportation, urban design, mental health, and resource management.
Hani Zein, a partner at Strategy& Middle East, emphasized that GenAI advancements are expected to impact all sectors in Saudi Arabia, with the telecom, media, entertainment, and technology sectors seeing the highest potential margin growth.
The report highlighted that GenAI can enhance research and development, streamline solution design, and automate business processes, potentially reducing costs by up to 30 percent. This will help accelerate the development of local intellectual property and establish Saudi Arabia as a hub for national tech champions.
The media and entertainment sector is projected to see a 14 percentage point margin growth by 2028, boosting operating profits by SR6 billion. GenAI will drive the creation of original Arabic content, hyper-personalize customer experiences, and enhance operational capabilities.
The telecom sector is also expected to benefit, with a 12 percentage point margin growth forecasted by 2028, increasing profits by SR11 billion. GenAI will enable telecom operators to differentiate their services and overcome challenges related to monetization and competition.
Strategy& Middle East experts stressed that companies must adopt a value-driven approach to GenAI, aligning initiatives with business goals, conducting thorough cost-benefit analyses, and ensuring operational readiness for successful implementation. A phased rollout governed by operational guardrails and precise measurements will be key to maximizing GenAI’s benefits.
