GE's latest survey shows that 4 in 10 global business executives believe the UAE has created an ‘innovation-conducive environment’. AFP
GE's latest survey shows that 4 in 10 global business executives believe the UAE has created an ‘innovation-conducive environment’. AFP
GE's latest survey shows that 4 in 10 global business executives believe the UAE has created an ‘innovation-conducive environment’. AFP
GE's latest survey shows that 4 in 10 global business executives believe the UAE has created an ‘innovation-conducive environment’. AFP

Saudi Arabia partners with Dell to boost emerging technology


Alkesh Sharma
  • English
  • Arabic

The Saudi Data and Artificial Intelligence Authority joined forces with US company Dell to build advanced capabilities in emerging technology such as artificial intelligence and machine learning.

The move will drive the joint development of engineering and technology projects in the kingdom, SDAIA said on Friday, a day after the agreement was signed at Gitex Technology Week in Dubai.

They will develop AI, cloud computing, data analytics and enterprise storage solutions.

“We are excited about the growth and opportunities created by the Fourth Industrial Revolution, and we are constantly striving to deliver products and services that are developed around advanced emerging technologies,” said Dr Esam Al-Wagait, director of Saudi Arabia’s National Information Centre.

“We are delighted to partner with Dell Technologies on our ongoing digital journey.”

Mr Al-Wagait signed the pact on behalf of SDAIA.

The kingdom intends to attract foreign and local investment worth $20 billion in the fields of data and AI in the next 10 years.

It launched its National Strategy for Data and Artificial Intelligence in October.

AI is expected to contribute up to 12.4 per cent of the country’s gross domestic product – about $135bn – by 2030, according to a report by consultancy PwC.

Mohammed Amin, Dell's senior vice president for the Middle East, said the US company looked forward to strengthening capacity-building efforts in AI and big data in a way that contributes to the development of the country's knowledge economy.

“It is a pleasure to collaborate with SDAIA as they look to enhance their role as the leading technology enabler of Saudi Arabia’s digital transformation vision,” he said.

The agreement will also enable the exchange of best practice and expertise to develop integrated projects that address the technology needs of public sector entities, SDAIA said.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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