Spending on artificial intelligence in the Middle East and Africa region will jump to $3 billion this year — accounting for nearly 2 per cent of global AI spending of $151.4 billion, according to a new report by International Data Corporation.
The region is expected to experience the fastest growth rate worldwide over the coming years, with the US-based research company predicting that Middle East and Africa AI spending will surge at a compound annual growth rate of 29.7 per cent to reach $6.4 billion in 2026.
Rapid adoption of cloud solutions by different industries and accelerated digital transformation will drive AI spending over the coming years, the report found.
“Organisations across the region are investing in AI technologies and related software and services to drive greater efficiency through automation and contribute to a more agile operating environment,” said Manish Ranjan, senior programme manager for software, cloud and IT services at IDC for the Middle East and Africa.
“The effects of the pandemic have fuelled further spending in relation to AI/ML [machine learning] adoption, particularly within the banking and finance, manufacturing, trade, health care and government verticals,” Mr Ranjan said.
The global AI market is projected to surpass $1.7 trillion in 2030, up from $93.5 billion in 2021, expanding at a compound annual growth rate of more than 38 per cent, data from Grand View Research indicates.
Banking, retail, and federal government will be the Middle East and Africa region's biggest spenders on AI this year, followed by manufacturing, according to IDC.
Together, these four industries will account for nearly 44 per cent of the region's total AI spending this year.
However, IDC expects professional services and transportation to be the fastest-growing industries in terms of AI spending over the 2022-2026 period, with annual growth rates of 36.4 per cent and 33.9 per cent, respectively.
Generative AI, one of the most disruptive offshoots of AI technology, holds immense potential, a recent report by Goldman Sachs found.
It uses machine learning to produce content such as text, images, video and audio, and can generate novel content, in the right context, instead of merely analysing or acting on existing data.
Generative AI could drive a 7 per cent (or almost $7 trillion) increase in the global economy and lift productivity growth by 1.5 percentage points over a 10-year period, Goldman Sachs said.
The global generative AI market is expected to reach $188.62 billion by 2032, growing at an annual rate of more than 36 per cent from $8.65 billion last year, according to a report by Brainy Insights.
The North America region dominated the market last year.
Overall, AI growth prospects in the Middle East and Africa region “look very promising as businesses are increasingly investing in AI- and analytics-based solutions to strengthen and expand their customer experiences, build digital capabilities and drive innovation,” Mr Ranjan said.
Augmented customer service agents, fraud analysis and investigation, improved threat intelligence and prevention systems, and sales process recommendation and expansion, are some of the key business use cases where regional organisations are investing more in the market.
However, the region will need more trained professionals to harness the technology, IDC said.
“Numerous challenges will accompany the region's increasing adoption of AI, with the most critical being the lack of skilled resources such as data scientists, data engineers and AI modellers,” Mr Ranjan said.
“However, the region has multiple initiatives in place aimed at upskilling local talent, with organisations in both the public and private sectors establishing partnerships to foster AI- and ML-specific learning,” he added.
