The UAE's push to develop artificial intelligence tools such as the Falcon large language model is helping to highlight the country's – and the wider region's – potential to become a major player in global technology, a top executive of Amazon Web Services has told The National.
Locally-developed AI models would serve Middle Eastern users well, at corporate and individual levels, as the developers have an up-front view of user requirements, Kevin Miller, vice president for global data centres at AWS, said in an interview.
“Clearly, Falcon is part of the conversation around core foundational models … that alone tells you there's a lot of capability in the Middle East to build game and world-changing technical capabilities,” he said, on the sidelines of the AWS Summit in Dubai on Wednesday.
“It's already shown that it is a strong powerhouse in this space … and absolutely puts the Middle East on the [AI] map.”
The rise of the Middle East as a technology centre is also reflected in the amount of investment flowing in, particularly from the West, on the back of a young and educated workforce and “real interest in start-ups”, Mr Miller said.
“There is also an enterprise customer population that is really interested in transforming their businesses … we're definitely seeing the right combination of factors that are very exciting for the Middle East.”
Falcon is the LLM developed by the Technology Innovation Institute, the Abu Dhabi government-backed research centre.
LLMs are types of generative artificial intelligence that can imitate human intelligence. They can distinguish, review, translate, forecast and produce new content – text, audio or visual – using large data sets.
Earlier this month, the Technology Innovation Institute (TII) introduced its latest iteration, Falcon 2, to compete with the likes of models developed by Meta, Google and OpenAI.
The TII, which is the applied research pillar of the UAE capital’s Advanced Technology Research Council, said the new series is multilingual and has been tested against several prominent AI models.
Another Abu Dhabi-made LLM, Jais, has also gained traction. Developed by local AI major G42, it was released in 2023 in collaboration with the Mohamed bin Zayed University of Artificial Intelligence and Silicon Valley-based Cerebras Systems.
“It's really smart for universities and countries to be investing in foundational research and development in this space,” Mr Miller said.
The UAE, the Arab world's second-biggest economy, has continued to emphasise its goal of becoming a leader in the AI industry, as it diversifies away from oil.
The development of LLMs in the Emirates has received worldwide attention, underpinned by government efforts to encourage the sector's growth, consultancy PwC previously told The National.
Generative AI's transformative capability is a key foundational technology “that is going to have decades of innovation” coming with it, Mr Miller said.
“It's meaningfully different from some things that have shown up as fads, in part because it really solves problems that customers have today.”
AWS, the cloud computing unit of the world's biggest e-commerce marketplace, has its Amazon Q generative AI platform, announced at its re:Invent conference in Las Vegas in November.
Amazon had largely maintained a low profile as the generative AI boom raged on, but chief executive Andy Jassy, in his annual letter to shareholders in April, acknowledged that the technology would be the next big thing.
The Seattle-based company has been able to launch more capabilities for its generative AI product, which is going head-to-head with Google's Gemini and industry leader OpenAI's ChatGPT.
AWS does not have any immediate plans to open more data centres, but it continues to track customer forecast and demand “every week” so it can plan expansion accordingly, Mr Miller said.
The latest major project to be opened in the Middle East will be AWS's infrastructure region in Saudi Arabia, announced at February's Leap technology conference in Riyadh.
AWS will invest $5.3 billion in Saudi Arabia and establish two innovation centres in the kingdom, the company said.
The company established data centres in Bahrain and the UAE in 2019 and 2022, respectively.
“We're seeing really nice demand for our services in the Middle East and we … continue building the capacity that they need,” Mr Miller said.
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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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THE BIO
Mr Al Qassimi is 37 and lives in Dubai
He is a keen drummer and loves gardening
His favourite way to unwind is spending time with his two children and cooking