AI expected to shake up Middle East and North Africa's technology ecosystem

It is set to gain further momentum as governments focus on leveraging its benefits and promoting public adoption

OpenAI's ChatGPT, which has kicked off a race with Google's Bard and drawn interest from Twitter chief executive Elon Musk, has opened a new era for AI. Reuters

Artificial intelligence is projected to make a significant impact in the Middle East and North Africa region's technology ecosystem, as rapid advancements in the sector drive adoption across industries, a study has found.

The technology, which has developed at a blistering pace, particularly after OpenAI's ChatGPT broke into the mainstream, is expected to gain further momentum as governments focus on leveraging its benefits and encourage people to adopt it, start-up data platform Magnitt said in a new report.

"The most significant use of artificial intelligence has been seen in the healthcare industry in areas such as diagnosis, telemedicine and drug discovery," start-up data platform Magnitt said in the report.

"AI is also blurring the lines between health care, enterprise and FinTech by providing insurance for healthcare professionals and offering revenue cycle management tools for healthcare organisations."

Governments in the Mena region have recognised the potential of emerging technologies and are taking steps to implement these into their economies and societies, while at the same time trying to attract investments from global companies.

Notable technologies that have been capturing the attention of organisations and individuals are blockchain, cryptocurrencies and the Internet of Things.

But by far the most popular is AI and machine learning, particularly augmented by the rise of generative AI, thanks to ChatGPT, which has kicked off a race with Google's Bard, drawn interest from Twitter chief executive Elon Musk and prompted Apple to work on improving its digital assistant Siri.

Investors poured in more than $4.2 billion through 215 deals into generative AI start-ups in 2021 and 2022 after interest surged in 2019, recent data from CB Insights showed.

The biggest Mena countries have already published their AI plans, led by the UAE, which was the first to release such a strategy and even appointed Omar Al Olama as Minister of State for Digital Economy, AI and Remote Working System, to focus on the innovation that is part of a wider digital transformation road map to prepare the Emirates for the economy of the future.

The UAE is also projected to reap the biggest impact from AI, pegged at close to 14 per cent of its GDP by 2030, Magnitt said.

Saudi Arabia, the Arab world's biggest economy, has also been pouring significant efforts into its digital transformation agenda, which is deeply embedded in its Vision 2030 strategy, as it looks to diversify its economy away from oil.

Globally, the adoption of AI-powered automation and remote work significantly rose during the Covid-19 pandemic, which continues to the present, sparking a change in consumer habits.

For instance, the e-commerce and retail sectors gained momentum because the closure of physical stores provided a new avenue for improving customer experience by collecting pools of customer data, which resulted in the sector being one of the fastest to opt for AI processes, Magnitt said.

Magnitt, however, acknowledged that while AI has the potential to bring significant benefits, it is not without its disadvantages.

The most notable downside of the technology is that it can replace humans in jobs and services, particularly those that are mundane and repetitive, especially if it means saving costs for companies.

Roughly 18 per cent of work globally could be automated by AI, with a bigger impact on developed rather than emerging markets, Goldman Sachs said in a March report.

In the Middle East, about 45 per cent could be potentially automated between now and 2030, Magnitt said, citing a study from McKinsey & Co.

Those who embrace AI are expected to benefit, and those who are behind the curve need to upskill or their services "might get compared with AI-enabled intelligent machines", Harish Dunakhe, senior research director at the International Data Corporation, told The National.

Some companies are also feeling the pinch. Chegg, a US education technology provider, saw its shares plummet 48 per cent after it said the emergence of ChatGPT dented its growth in the first quarter.

"This also opens a whole new avenue of re-skilling and the chance for companies to attain high productivity and growth by equipping the workforce with the right skills as AI and automated processes are adopted," Magnitt said.

"That is not to say the cultural implications of adopting AI can be ignored: there is a certain level of scepticism around when it comes to AI integration, especially in company processes of decision-making and problem-solving."