UAE: Artificial Intelligence market to reach $1.9b by 2026

The value of the artificial intelligence (AI) market in the UAE is expected to reach $1.9 billion by 2026, representing a compound annual growth rate (CAGR) of 36.2 per cent, research shows.

The AI market in Middle East is expected to grow significantly in the coming years. According to a report by Research and Markets, the AI market in the Middle East and Africa is expected to grow from $500 million in 2020 to $8.4 billion by 2026, representing a CAGR of 47.8 per cent.

The UAE is expected to be one of the key markets for AI in the region, with the government and businesses investing heavily in AI initiatives. In 2020, the UAE’s AI market was valued at $290 million, data shows.

As adoption of AI into business practices gains ground in the Middle East, business leaders need to clearly understand their data and AI goals, partner where necessary, iterate and experiment, focus on business impact and user experience, and above all, embrace change in the way of work, a leading consulting firm has said.

According to a study by Protiviti Middle East, more than 80 per cent of Middle East CEOs believe that AI is critical to the future of their businesses, and over 70 per cent of them are investing in AI.

The UAE is one of the most advanced countries in the region regarding AI adoption. Government impetus on UAE’s National Artificial Intelligence Strategy 2031, with its focus on attracting talent for jobs of the future, funding research and innovation hubs, developing of appropriate infrastructure and data ecosystems along with a balanced legislative environment, has reaffirmed UAE’s position as a global hub for AI.

Saudi Arabia is also investing heavily in AI. In 2019, the country’s sovereign wealth fund, the Public Investment Fund, announced a $500 billion investment in AI and other emerging technologies over the next decade. The government has also launched several AI initiatives. Saudi Arabian Data and Artificial Intelligence Authority and National Data Management Office are driving a national-level transformation towards a data-driven culture in the public and private sectors.

“However, lack of data governance and literacy, and talent shortage are leading to sub-optimal adoption in organisations today that have embarked upon a journey to drive a data-driven culture,” Amit Ray, managing director, Protiviti Member Firm for the Middle East, told Khaleej Times in an interview.

As with any technology, AI comes with its own risks and challenges. Some of the potential risks posed by AI to businesses in the region include —

• Data privacy and security: AI requires vast amounts of data, and businesses need to ensure that the data they collect and use is secure and complies with privacy regulations.

• Bias and discrimination: AI algorithms can perpetuate bias and discrimination if they are trained on biased data or if the algorithms themselves are biased. This can result in unfair or discriminatory outcomes, such as in hiring or lending decisions.

• Lack of transparency and accountability: As AI becomes more complex, it can be difficult to understand how it reaches its conclusions or to identify errors or biases in its decision-making. This can make it challenging to hold businesses accountable for the decisions made by their AI systems.

Overall, AI has the potential to bring significant benefits to businesses in the Middle East. However, companies will need to carefully manage the risks and challenges associated with this technology to fully realize its potential, Ray said.