Middle East organisations set to increase investment in AI

More than 65% of organisations in the Middle East, including the UAE, plan to increase investment in AI in the coming year despite the talent and technology challenges they face, according to a new report.

Published by Deloitte, in collaboration with Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), the report revealed the immense opportunities presented by artificial intelligence (AI) in the Middle East.

Called ‘The Perfect Storm: A perspective on unlocking AI’s value in Middle East’, the report also shines a spotlight on the challenges organisations face when investing in AI technology and ensuring they fully understand and utilise its potential.

It draws on insights from more than 150 business and technology leaders across the UAE, Saudi Arabia and Qatar, supplemented by interviews with key industry figures. It explores the dynamics of AI adoption while identifying the challenges that hinder progress and the strategies organizations are using to manage risks and maximise value.

While organisations across the Middle East are rapidly increasing AI investments, many lack the foundations needed to realise its full value, the report said.

The research shows more than 80% of organisations feel pressured to adopt AI, yet almost half say they lack the talent and technology capabilities for successful scaling. Despite these challenges, 69% of organisations plan to increase investment in AI technologies in the coming year, according to the report.

Mutasem Dajani, Deloitte Middle East CEO, said: “The GCC region [Cooperation Council for the Arab States of the Gulf] is making substantial investments in AI, driven by strong government commitments. With increasing funding for AI infrastructure and a growing emphasis on developing local talent, the region is positioning itself as a global leader in AI innovation. This transformation is accelerating the shift toward knowledge-based economies, compelling organisations to fundamentally rethink their operations.”

Survey respondents claimed high levels of preparedness for technology infrastructure (71%), talent (68%) and strategy (69%). Risk and governance were slightly lower in terms of feeling highly or very highly prepared (63%). However, when considering only Generative AI (GenAI), global leaders felt much less prepared to address risk and governance, with 41% of leaders reporting they were only slightly or not at all prepared.

Professor Sami Haddadin, MBZUAI’s Vice President for Research, said: “This research highlights an increased focus on developing local AI specialists and practitioners who understand the potential of AI and how to execute implementation, while addressing concerns such as privacy and ethics. The report reveals a critical disconnect – a strong appetite among Middle Eastern organisations to deploy AI outpacing their readiness in terms of talent, strategic planning, and infrastructure.”

In terms of the perceived key benefits of GenAI, 91% of respondents expect increased productivity to be the most transformational benefit. The report found that one in three organisations in the Middle East are spending more than 60% of their AI budget on GenAI, compared with data showing that 72% of global organisations are spending less than 40%. However, not all organisations view AI in a positive light, with 41% seeing AI as a significant threat to their current operating model.

A significant hurdle faced by organisations developing and deploying AI tools is selecting the right technologies, as highlighted by 34% of respondents. Given the complexity of the available AI solutions, it can be difficult for business leaders to know which applications align best with organisational objectives, while another major challenge – difficulty identifying use cases – is closely linked, as organisations grapple with how GenAI can benefit their business.

The report also found:

• UAE leads in adopting IT, digital, and operations-focused AI.
• Most organisations report being in the early stages or proof-of-concept phase of AI adoption, with leading use cases including content generation and summarization.
• Almost 70% of organisations plan to increase headcount for AI roles, emphasising a need for talent growth including upskilling existing staff and attracting AI graduates.
• Organisations see AI’s primary benefits as increased productivity (91%) and efficiency but struggle to measure ROI effectively.
• Data security (65%), regulation compliance (67%) and the talent gap (44%) are among the top concerns for AI implementation.
• Some 34% of respondents faced a significant hurdle selecting the right technologies to develop and deploy AI tools.
• The main reasons for AI model selection are support/access to expertise, accuracy and speed.