Generative artificial intelligence (AI), with ChatGPT as a prime example, is taking over the tech world. In the Middle East and North Africa (MENA) region, this technology is particularly gaining momentum at a swift pace. According to recent figures, its annual economic impact could reach $23.5 billion by 2030.
The region is keen on leveraging generative AI to foster innovation and drive economic growth. This interest is particularly evident in Saudi Arabia and the United Arab Emirates (UAE), where the technology is expected to boost yearly revenues by $12.2 billion and $5.3 billion, respectively.
Investing in generative AI and data centers
Sundeep Gantori, CIO equity strategist at the Swiss bank UBS, said that while the generative AI adoption in MENA is in its early stages, it is expected to grow rapidly, at 61 percent between 2023 and 2027. Various investments could further fuel this growth.
“Over the next 12 to 18 months, we expect to see significant investments in [regional] AI infrastructure and believe Middle Eastern companies will build AI data centers and train data sets,” explained Gantori.
“By mid-2024 and 2025, we will see the start of second-stage investments in AI applications – with clear monetization opportunities – in software, internet and other platforms,” he added.
In recent years, the MENA region is also particularly experiencing a data center investment boom driven by its digital transformation efforts.
Earlier this 2023, Saudi’s Public Investment Fund partnered with DigitalBridge Group, a US-based asset manager. This team-up aspires to develop data centers in Saudi Arabia and across the Gulf Cooperation Council (GCC).
Additionally, Microsoft announced its plans to invest in a cloud data center hub in Saudi. This comes after it unveiled a cloud hyper-center in Qatar in 2022.
In Oman, the Ministry of Transport, Communications, and Information Technology partnered with tech company SAP to unveil a private cloud data center. It will be the first of its kind in the said country.
MENA’s largest network, the Khazna Data Centers, meanwhile disclosed that it eyes to establish a hyper-scale data center in Egypt’s Maadi Technology Park. The project is worth $250 million.
In the UAE, telecom operator Du has launched two data center facilities. In addition, e& inked a deal with AI company G42 to build the biggest data center in the country.
According to recent reports, Saudi, the UAE, and Egypt’s collective data center capacity is predicted to more than double in the next two years.
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MENA responds to generative AI’s popularity
ChatGPT is one of the most well-known examples of generative AI today. Earlier in January, the platform hit over 100 million monthly users. It has also overtaken Netflix in terms of web traffic.
Leveraging on such a tool’s popularity, the MENA region has been responding with similar tech offerings. Last month, the Technology Innovation Institute, the UAE government-backed research hub, unveiled Falcon 180B. This is an advanced version of its flagship large language model (LLM) using generative AI.
Meanwhile, UAE tech company AstraTech is also integrating an Arabic language ChatGPT function into its messaging app, Botim. This app also provides generative AI support for payments and international money transfers.
“We see low-hanging opportunities in the Middle East’s technology, media and telecommunications and healthcare industries, given their digital focus,” shared Gantori.
“Eventually, generative AI should also create a significant impact in other industries like government, oil and gas, industrials and manufacturing,” he added.
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