Generative AI (GenAI) is poised to revolutionize multiple sectors in Saudi Arabia, offering significant competitive advantages for early adopters, according to new research by Strategy& Middle East, part of the PwC network.
“GenAI advancements are expected to impact every industry in Saudi Arabia. Our analysis shows that the telecom, media & entertainment, and technology sectors have the highest potential for margin growth through GenAI adoption. This provides companies with a unique opportunity to rethink their strategies and explore new avenues for growth and innovation,” said Hani Zein, Partner with Strategy& Middle East.
Technology Sector
The Saudi technology sector is expected to benefit the most from GenAI adoption, with a potential operating profit margin increase of 15 percentage points by 2028, adding up to SR15 billion ($4 billion) to its operating profit.
This growth could be realized by developing and commercializing new GenAI use cases and meeting the rising demand for advanced hardware and infrastructure. Additionally, Saudi tech firms can leverage GenAI to boost R&D capabilities, streamline solution design, and automate internal processes, potentially reducing costs by 30%.
“GenAI can serve as a catalyst for developing local intellectual property and help position Saudi Arabia as a hub for national tech champions, creating significant growth opportunities and enhancing capabilities,” noted Fawaz BouAlwan, Partner with Strategy& Middle East.
Media & Entertainment Sector
The media and entertainment sector could see margin growth of 14 percentage points by 2028, with operating profit increasing by up to SR6 billion. GenAI offers opportunities for firms to create more original Arabic content, hyper-personalize customer experiences, and enhance operational efficiencies.
The sector also has room to better monetize its customer base, with advertising spending per capita currently up to SR240 in Saudi Arabia. This would further support the kingdom’s transformation into a media and entertainment hub, aligned with national objectives.
Telecom Sector
Saudi Arabia’s telecom sector could experience a 12 percentage point increase in margin growth by 2028, adding SR11 billion to operating profit. Telcos can use GenAI to gain deeper insights into broadband customers, improve infrastructure utilization, and enhance value propositions.
By analyzing customer behavior, telecoms can hyper-personalize campaigns, accelerate ICT cross-selling to SMEs, and capture a projected SR10 billion opportunity by 2028. GenAI will also help telcos differentiate themselves from competitors by developing sophisticated customer segmentations and customized product portfolios.
“To successfully integrate GenAI, companies need a value-driven approach that aligns with business goals and delivers measurable results. This includes performing cost-benefit analyses, ensuring operational readiness, and executing phased rollouts with strong governance,” said Ali Ghaddar, Principal with Strategy& Middle East.
The study highlights that with proper planning and execution, GenAI has the potential to reshape industries and create substantial growth opportunities in Saudi Arabia.
