Saudi Arabia’s AI adoption ignites technological advancement and economic growth

Abdullah Al-Swaha, Saudi minister of communications and IT. (Supplied)
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Updated 02 May 2024
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Saudi Arabia’s AI adoption ignites technological advancement and economic growth

  • Adoption of AI will help foster a knowledge-based economy and equip Saudi youth with skills for the digital age
  • Key initiatives, include the National Strategy for Data and AI, aim to establish Saudi Arabia as a global AI leader by 2030

RIYADH: As artificial intelligence gains global attention and becomes a buzzword, Saudi Arabia is positioned for accelerated adoption to enhance efficiency across its industries.

Over the years, AI has evolved into a transformative technology revolutionizing numerous industries and domains. Its development and adoption across sectors have spurred significant advancements, already reshaping how people live and work globally.

According to a recent report by the professional services firm PwC, the projected economic impact of AI in the Middle East by 2030 is $320 billion, with an estimated $135.2 billion attributed to Saudi Arabia.

The report also highlights an annual growth rate in AI contribution ranging between 20 percent and 34 percent across the region, with the UAE experiencing the fastest growth, followed by Saudi Arabia.

“Such growth and demand for AI demonstrated that the impact on industries can be substantial and wide-ranging both in Saudi Arabia and the wider region,” said Slava Bogdan, CEO & co-founder at Flowwow, to Arab News.

Flowwow, a global gifting marketplace, simplifies gift-giving and connects local brands with customers. It hosts over 14,000 local brands from 1,000 cities and operates in over 30 countries, including the UAE, Spain, the UK, and Brazil.

“Whether it’s hospitality, manufacturing, telecommunication, or business technologies, where Flowwow sits, I could say that AI solutions, firstly, could automate repetitive tasks, allowing employees to focus on more strategic and creative work, especially in data analysis, customer service, and marketing,” Bogdan said.

The CEO further explained how the firm’s marketers frequently utilize AI to target audiences, enhance creatives, or conduct competitive analysis, particularly in global markets like the Middle East and North Africa. This reduces decision-making time and allows for more strategic tasks that necessitate a tailored approach.

“Moreover, AI algorithms can analyze large amounts of data to identify patterns and trends, helping businesses make more informed decisions,” Bogdan explained.

“This attribute can lead to better forecasting, resource allocation, and risk management, especially in the financial sector, having had 25 percent of all regional AI investments,” he added.

Speaking to Arab News, Brahim Laaidi, partner at Bain & Co., emphasized that AI adoption in sectors like energy and healthcare aids “the Kingdom’s economic diversification and fosters a knowledge-based economy, enhancing efficiency and driving growth.”

Moreover, AI is recognized for enhancing customer experience and reducing costs for firms in various ways.

DID YOU KNOW?

• Saudi Arabia was one of the first nations to utilize data and artificial intelligence technologies to achieve its Vision 2030 goals.

• There are five prominent types of AI: machine learning, natural language processing, computer vision, speech recognition and robots.

• The Saudi Data and AI Authority has created AI ethics principles in accordance with the Kingdom’s commitment to human rights.

• SDAIA estimates SR412.5 billion ($109.96 billion) in global spending on AI by 2024 end.

“AI chatbots and virtual assistants provide 24/7 customer support, reducing costs. Multiple Saudi firms and banks use chatbots for customer service,” highlighted Laaidi.

He also illustrated how AI analyzes customer behavior to create personalized experiences, citing examples like Netflix and Spotify, which utilize AI to tailor content based on user preferences and listening habits.

Laaidi also highlighted how “AI facilitates segmentation based on behavior and profitability for targeted marketing. Coca-Cola utilizes AI for consumer segmentation.”

“In a nutshell, for most enterprises, the focus remains on leveraging narrow or vertical AI solutions to enhance specific business processes, improve customer experiences, or optimize operations,” he added.

According to Jad Haddad, head of Digital IMEA at management consulting firm Oliver Wyman, AI essentially democratizes access to intelligence, making it cheaper and more widely available.

This can generate significant efficiencies by augmenting employee capabilities, enabling them to complete tasks faster, and automating certain processes without human intervention.

Oliver Wyman estimates that up to 35 percent of tasks globally may be augmented or automated by AI in the next three years.

“In Saudi Arabia, considering the current economic structure, Oliver Wyman estimates that up to 17 percent of tasks may be affected within that time frame,” Haddad told Arab News.

AI projects and employment

It is evident that the Kingdom has been significantly investing in AI in recent years.

Key initiatives, according to Laaidi, include the National Strategy for Data and AI, aiming to establish Saudi Arabia as a global AI leader by 2030. Additionally, Neom, a planned smart city, is poised to leverage AI in urban planning and environmental management.

“The Saudi Data and Artificial Intelligence Authority was established in 2020 to regulate AI development, and Tonomous collaborates with global tech leaders to enhance the city’s projects,” he added.

Laaidi continued by stating that AI and Robotics Centers, formed through partnerships with universities and international entities, are advancing AI in the Kingdom. From a technology industry perspective, it offers diverse applications and significant benefits.

According to Cristina Carranza, global head of business development at GGTech Entertainment, AI stands as a powerful tool with vast potential to enhance operational efficiency across various domains.

“We use AI selectively, focusing on specific areas where it can augment human skills and improve processes,” Carranza told Arab News.

She gives examples of how AI algorithms are utilized to analyze player data and preferences, enabling them to tailor game experiences and enhance player engagement. “In addition, AI-driven predictive analytics help us anticipate market trends and make informed decisions.”

However, Carranza emphasized the importance of acknowledging that while AI is embraced as a tool for progress, there is a recognition of the necessity of human oversight and control.

“We believe in a symbiotic relationship between humans and AI, where the technology enhances our capabilities but is always subject to human direction and control,” she added,

New dimensions

From GGTech Entertainment’s perspective, AI opens up exciting new dimensions in gaming and entertainment.

Carranza revealed that one significant area involves the optimization of game design processes, where AI algorithms analyze player feedback and behavior data to inform the creation of more engaging and immersive gaming experiences.

“Additionally, AI-powered tools enhance player interaction through personalized recommendations and real-time assistance, fostering deeper engagement and loyalty,” she explained.

The global head further addressed how AI-driven analytics offer valuable insights into player behavior and market trends, empowering GGTech to make data-driven decisions and maintain a competitive edge in the industry.

Bridging skill gaps

The Kingdom’s journey to become an AI leader involves challenges encompassing ethical and legal aspects, data availability and quality, as well as skill gaps, infrastructure requirements, public trust, and the need for international collaborations.

“To navigate these dilemmas, the SDAIA and the National Data Management Office have been established to construct ethical guidelines and improve data governance,” Laaidi explained.

Similarly, the National Cybersecurity Authority continues to safeguard Saudi Arabia's digital infrastructure, including AI systems.

Laaidi emphasized Saudi Arabia’s prioritization of STEM education and training to bridge skill gaps, citing initiatives like the Prince Mohammed bin Salman College of Cyber Security aimed at fostering local talent in AI-related fields.

He highlighted the importance of focusing on STEM disciplines for developing a workforce equipped with the necessary skills for an AI-driven future.

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“Substantial investments are being made in infrastructure, with emphasis on high-performance computing and cloud computing capabilities to support AI development and deployment. Building public trust is also a key venture for the Kingdom,” the partner stressed.

In addition, the Kingdom seeks international collaborations with leading AI research entities worldwide to expedite AI capabilities. “By addressing these challenges strategically, Saudi Arabia aims to create a conducive environment for AI development and adoption,” he emphasized.

From a technological perspective, the adoption of AI can present challenges in navigating ethical considerations and ensuring human control.

“At GGTech, we recognize the importance of maintaining human oversight and ethical standards while leveraging AI technologies. To address this challenge, we prioritize transparency and accountability in our AI algorithms and processes, ensuring they are aligned with our values and ethical guidelines,” Carranza described.

She further added that they invest in ongoing training and education for team members to enhance their understanding of AI and its implications, enabling them to make informed decisions and mitigate potential risks.

Reskilling Saudi workforce    

Undoubtedly, marketers and creative leaders should prepare for the changes in their professional field resulting from AI adoption.

Bogdan explained that one of the crucial skills is the ability to ask AI the right questions and write clear prompts. He emphasized that it is necessary to understand, at least at a basic level, how AI algorithms work.

“At Flowwow, we acquaint employees with the different instruments to make AI a helpful assistant that allows us to analyze competitors’ websites, fact-check and edit texts, test tasks, and answers,” he continued.

The CEO highlighted that as the Kingdom invests resources to integrate AI into every sector, it creates more opportunities for entrepreneurs to establish their businesses and startups equipped with AI tools.

“Hence, apps and services developed with AI solutions will be on the edge. In this case, product managers and programmers should gain a thorough understanding of machine learning to create up-to-date apps,” Bogdan highlighted.

The CEO stressed that it will mostly be up to companies to invest in continuous learning and upskilling through educational short courses for their workers. “This investment is crucial to ensure that the workforce remains competitive and competent in leveraging advancements in AI effectively.”

Saudi Vision 2030  

AI is a driving force behind Saudi Arabia’s Vision 2030, fueling economic diversification, smart cities, and public service transformation.

According to Laaidi, “AI boosts innovation across non-oil sectors, enables intelligent urban planning in projects like NEOM, and promotes Industry 4.0 through automation and predictive maintenance.”

“AI also improves government services via chatbots, automation, and analytics. In healthcare, AI enhances medical imaging, drug discovery, and personalized medicine,” he highlighted.

On top of that, Laaidi emphasized how AI educational tools prepare the workforce and optimize resource allocation, while support for clean energy promotes sustainability.

“Vision 2030 powered by AI seamlessly connects economic domains, accelerating progress and innovation across the Kingdom,” he affirmed.

On another note, GGTech Entertainment's use of AI aligns with the goals of Saudi Vision 2030 by driving innovation, promoting economic diversification, and empowering Saudi youth with advanced skills and capabilities, according to the firm's global head.

“One way AI contributes to this vision is by enhancing gaming experiences and promoting the Kingdom as a global hub for entertainment and technology,” said Carranza.

By utilizing AI-powered tools for game design, player interaction, and analytics, GGTech Entertainment is delivering cutting-edge gaming experiences that showcase Saudi Arabia’s technological prowess and creativity to a global audience, she emphasized.

“In addition, the use of AI creates opportunities for job creation and economic growth in the Kingdom. As GGTech expands its AI capabilities, it is investing in the development of a skilled workforce with expertise in AI technologies and data analytics,” the company’s global head said.

She concluded by highlighting how this not only aligns with the goals of Saudi Vision 2030 to foster a knowledge-based economy but also equips Saudi youth with the skills they need to thrive in the digital age.


Saudi Arabia issues 54 industrial licenses in March 

Updated 23 May 2024
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Saudi Arabia issues 54 industrial licenses in March 

RIYADH: Saudi Arabia maintained the issuance of over 300 industrial licenses in the first quarter of 2024, consistent with the previous year, official data has revealed.

According to a statement released from the Kingdom’s Ministry of Industry and Mineral Resources, as many as 324 industrial permits were issued in the first three months of the year, with 54 approvals issued in March alone. 

The report further showed that the volume of investments in March amounted to SR1.047 billion ($279 million). 

This falls in line with the Saudi Arabia’s ambition to transform mining into a foundational industrial pillar of the country’s economy. 

It also aligns with the ministry’s goal to strengthen the sector as well as contribute to the ongoing developments in accordance with Vision 2030.

Moreover, the report, which was issued by the ministry’s National Industrial and Mining Information Center, disclosed that the permits in March were distributed across several sectors, including the manufacturing of non-metallic mineral and food products and formed metal goods as well as chemicals and paper and its products. 

According to the analysis, the new industrial licenses were distributed among multiple regions, including the Eastern Province, Riyadh and Makkah, as well as Qassim, Jazan, Madinah, Al-Jouf, and Al-Baha. 

The distribution of new permits shows that small enterprises comprised 77.78 percent, with medium-sized companies following at 22.22 percent. 

In terms of the type of investments, national factories accounted for the largest percentage of the total licenses, with 98.15 percent, followed by foreign establishments with 1.85 percent. 

Furthermore, the study also indicated that the number of factories existing and under construction in the Kingdom until the end of the same month reached 11,832 factories, up from 11,757 facilities in February, with an investment volume of SR1.528 trillion.

Meanwhile, 69 factories started production in March, with an investment volume of SR1.339 billion.

The ministry issues its report monthly to establish the sector’s most critical indicators in Saudi Arabia, demonstrating the extent of change and the growth of industrial investments. 

In April, the Kingdom introduced the Mining Exploration Enablement Program, inviting global firms and explorers to participate in the initiative in an attempt to further expand the sector.

According to a statement at the time, Saudi Arabia’s Ministry of Industry and Mineral Resources and the Ministry of Investment extended invitations to international companies in the sector to register for the scheme. 

The statement further added at the time that the program is expected to boost exploration activities, optimize the value extracted from the mining sector, and expand the Kingdom’s survey potential by focusing on uncharted territories.  


Saudi Arabia to reshape global tourism landscape, says Al-Khateeb 

Updated 51 min 1 sec ago
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Saudi Arabia to reshape global tourism landscape, says Al-Khateeb 

RIYADH: Saudi Arabia is on track to change the map of tourism on a global level, according to a top minister.  

Participating in a dialogue session on the sidelines of the 50th UN Tourism Regional Commission for the Middle East taking place from May 22 to 24 in Muscat, Saudi Tourism Minister Ahmed Al-Khateeb stressed that the Kingdom is working in cooperation with regional member states of the organization to further develop the industry, according to the Saudi Press Agency. 

This is in line with Saudi Arabia’s National Tourism Strategy, which aims to reach 150 million visitors by 2030, grow the private sector’s contribution, and attract direct foreign investments, adding to the economic growth and diversification. 

“The Kingdom will change the map of tourism in the world, and the opportunities and facilities that we provide to investors will make the tourism sector more attractive, and we are proceeding in a distinctive way in building the sector,” Al-Khateeb affirmed. 

During the session, the minister also indicated that Saudi Arabia has begun to develop the tourism division as part of its Vision 2030 plan, noting that the development efforts have succeeded in raising the sector’s contribution from 3 percent of the local economy to 4.5 percent by the end of the last year.  

Al-Khateeb also drew attention to the fact that the Middle East has great potential and natural resources that enable it to become one of the most important tourist destinations in the world.  

He explained that the countries in the region are moving as a single bloc in the right direction regarding developing the tourism sector, as they have begun designing plans and strategies to benefit from this promising industry.  

The minister highlighted that attracting and qualifying the national human resources are two important factors for developing the regional sector, stressing that the Saudi Ministry of Tourism pays great attention to the issue of qualifying national cadres working in the field. 

The body also works to attract young men and women in the Kingdom to work in the industry. 

In April, the deputy minister of destination enablement at the Ministry of Tourism said that Saudi Arabia is open to readjusting its goal of attracting 150 million visitors by 2030 if those numbers are achieved ahead of time.  

Speaking in an interview with Arab News on the sidelines of the first day of the Future Hospitality Summit in Riyadh, Mahmoud Abdulhadi explained that goals are adjusted based on performance.    

“As we hit our target seven years ahead of target, our 100 million target, we therefore now have a new goal. I’m sure if we were to hit that new target with a significant overperformance in terms of the timeline, our targets would also be adjusted,” Abdulhadi said.


Brazil scheduled to host FII Priority Summit in June 

Updated 32 min 26 sec ago
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Brazil scheduled to host FII Priority Summit in June 

RIYADH: The Future Investment Initiative Institute has expanded its reach by unveiling its inaugural Latin American FII Priority Summit scheduled to take place in Brazil.

The event under the theme “Invest in Dignity” will take place from June 11 to 13 at the Copacabana Palace in Rio de Janeiro, the Saudi Press Agency reported.

The Rio summit will explore how investing in renewable energy, artificial intelligence, entrepreneurship, and social impact can put people, respect, and dignity at the heart of policymaking. 

Moreover, discussions will touch on ensuring that all citizens’ dignity is protected and prioritized, suggesting that this should be a goal for all economic decision-makers.

As per SPA, FII Institute chief executive and board member Richard Attias said the focus will be on responsible investment and economic growth decision-making.

“This summit marks a pivotal moment in shaping a sustainable and technologically advanced future for all,” said Attias.

The FII Priority program is an annual series of summits, reports, and initiatives designed to tackle the world’s biggest challenges and concerns.

On the other hand, Saudi Arabia reaffirms its role as a global hub for discussions on a prosperous future as the FII Institute unveiled the theme “Infinite Horizons: Investing Today, Shaping Tomorrow” for its eighth annual FII conference, scheduled to take place from Oct. 29 to 31 at Riyadh’s King Abdulaziz International Conference Centre. 

With this theme, the event will ignite talks on how investment can serve as a catalyst for a prosperous and sustainable future, pushing the boundaries of what is possible for humanity.

The discussions at the conference will be data-driven, ensuring that insights are based on facts and actionable strategies, SPA reported.

Attias emphasized the significance of the theme, highlighting that it is a loud call “to expand our collective vision and embrace the limitless prospects of the future.”

He added: “It embodies our commitment to driving conversations that lead to a future where investment knows no bounds and works towards a better tomorrow for all.”

FII8, organized by the FII Institute and founded by Saudi Arabia’s Public Investment Fund, will adopt an innovative format as an exclusive week for FII Institute members, invited delegates, and strategic partners.


SDAIA chief calls for strong legal frameworks to mitigate AI risks

Updated 23 May 2024
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SDAIA chief calls for strong legal frameworks to mitigate AI risks

RIYADH: The chief of Saudi Arabia’s artificial intelligence authority took part in a top-level summit on AI held in South Korea from May 21-22.

Co-hosted by South Korea and the UK, the summit focused on international cooperation in data and AI, as well as preparations for the third edition of the Global AI Summit, hosted in Riyadh by the Saudi Data and AI Authority in September.

The authority’s president, Abdullah bin Sharaf Al-Ghamdi, in a roundtable discussion at the Seoul summit, said that AI technologies will “experience significant developments” that will result in more efficient and scalable models capable of handling a wider range of tasks.

He highlighted the significance of open-source AI, which fuels innovation and reshapes the technological landscape. A goal of the summit was to explore the transformative potential of open-source AI and open-access databases, he added.

“Open-source AI has the capability to add flexible character to technology, making advanced tools and algorithms accessible to a broad spectrum of creators, such as large companies and individual developers,” Al-Ghamdi said.

This inclusivity accelerates technological advancement through collaboration and ensures a level of transparency in the digital age, Al-Ghamdi added, calling for robust governance frameworks, international cooperation and continuous public awareness efforts to mitigate risks.

Governments require strategies that balance the need for open-source databases to fuel AI innovations while protecting individual privacy and ensuring data security, a balance that can be achieved through strict data protection laws and technical solutions, the SDAIA chief said.

As data flows transcend national borders, coordinating international standards for data access and privacy becomes critical, he added.

“This requires the presence of globally standardized data protection laws, where local regulations must adapt to address specific cultural and economic contexts. This coordination facilitates smoother data exchange, enhances security and privacy, and helps address global challenges collectively.”

By adopting open-source AI and open databases, “we can bring technology to a larger number of people, promote transparency, and foster a more inclusive technological landscape,” Al-Ghamdi said.

“However, this future also requires effective governance, strong regulatory frameworks, and proactive international collaboration to overcome risks and harness the full potential of AI responsibly.”

The Seoul summit was attended by technology and communications ministers as well as AI experts from countries around the world.


Saudi Arabia set to host UNCTAD Global Supply Chain Forum in 2026 

Updated 23 May 2024
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Saudi Arabia set to host UNCTAD Global Supply Chain Forum in 2026 

RIYADH: Saudi Arabia will host the UN Trade and Development Global Supply Chain Forum in 2026, reinforcing its growing status as a global logistics hub. 

The international event will bring together leaders, experts, and organizations to shape the future of international trade.  

The biannual event — the first edition of which is being held from May 21 to 24 in Bridgetown, Barbados — aims to serve as a platform for global dialogue, shaping the investment environment in line with the UN’s Sustainable Development Goals. 

As per a statement from the Saudi Ports Authority, also known as Mawani, this accomplishment solidifies the Kingdom’s position as a key global logistics center and a pivotal point for connecting three continents. 

Saleh bin Nasser Al-Jasser, minister of transport and logistics services and chairman of the authority, stated that hosting this event reflects Saudi Arabia’s prominent position on the global stage and its significant influence in international organizations.  

He underscored the leadership’s commitment to supporting the transport and logistics sector to achieve developmental and service-oriented projects and initiatives, aligned with the ambitious goals of the National Transport and Logistics Strategy under Vision 2030. 

Al-Jasser added that winning the bid to host the 2026 UNCTAD Global Supply Chain Forum is a testament to the remarkable efforts in the ports and supply chain sector.  

It also mirrors the growth in operational capabilities and efficiency, as well as the substantial investments Mawani has made in developing infrastructure and maritime services in collaboration with the private sector, the release added.  

The current situation involves incidents targeting commercial vessels in the Red Sea, disruptions to Suez Canal shipping, instability in the Black Sea due to the conflict in Ukraine, and drought-related water level reductions in the Panama Canal, impacting vital trade routes. 

On another front, the increasing connectivity of Saudi ports with global counterparts, along with significant advancements in strategic partnerships with major international shipping lines, has led to the introduction of new maritime services linking the Kingdom with continents across the globe. This development is contributing to enhanced trade, exports, and global market connectivity. 

Omar bin Talal Hariri, president of Mawani, highlighted that this accomplishment reflects the successful efforts in developing logistics service standards. 

He added that the endeavor aids in supporting global trade, adopting innovative technologies in the maritime and logistics sector, and employing artificial intelligence to enhance services provided to beneficiaries.  

These efforts contribute to ensuring a more inclusive and sustainable future for global supply chains.