How agentic AI will boost the digital economy across the Middle East

Artificial intelligence is quickly becoming the Middle East’s next economic growth opportunity, propelled largely by national strategies that bet big on virtual brains. From the UAE’s AI Strategy 2031 to Saudi Arabia’s Vision 2030 and Qatar’s TASMU Smart Qatar programme, countries around the region have set in motion far-reaching AI initiatives.

The beginnings of the vibrant digital economy in the region began with the creation of technology enablers such as technology parks and e-government initiatives in the early 2000s as part of the digital transformation journey in the region.

By the mid-2010s, the integration of AI in a variety of sectors from health, to finance and energy, was on the rise. In the healthcare sector alone, it has been predicted that wide implementation of digital healthcare solutions would create a $15bn to $27bn increase in economic benefit to Saudi Arabia’s health system by 2030

From consumer to innovator

The monumental shift from being a consumer of technology to an innovator of cutting-edge AI technology came with the development of homegrown generative AI models in the last 18 months. UAE’s Technology Innovation Institute developed Falcon, an open-source large language model. G42 launched Jais which addressed the need for culturally relevant AI in the region. ALLaM, Saudi Arabia’s Arabic LLM that was launched a few months ago was a huge milestone for the kingdom, and so was Aramco Digital’s Metabrain initiative.

As we approach the mid-2020s, the Middle East has an opportunity to benefit from the next AI frontier: agentic AI. This is a giant step forward from typical AI systems with its ability to act on its own with minimal human intervention. With this autonomy, nations can solve more complex problems and perform multi-step tasks that previously needed intensive human supervision.

Agentic AI systems are being explored for urban management as part of smart city projects such as Neom in Saudi Arabia, while banks and healthcare institutions across the region are examining the power of agentic AI for risk assessment and adaptive treatment plans.

The Middle East is on the verge of being an AI world leader

Being geographically placed at the intersection between East and West, the Middle East has a unique potential to develop culturally intelligent digital agents.

Like any melting pot of civilisations, the region has the potential to build AI systems that are excellent at cross-cultural communication. With these AI agents, we could have the ability to adapt to diverse cultural contexts that will improve global business negotiations, diplomacy and education. It may contain nuances of language translation, it may help illuminate region-specific market trends, and it may assist in sensitive conflict resolution.

If the Middle East could somehow infuse AI with deep cultural awareness, it would have a chance to be the leader in creating respectful and globally minded AI agents. The region has the potential to gain a huge advantage in the international AI market by exporting cultural intelligence in AI.

PwC predicts that by 2030 AI will contribute $320bn to the region’s GDP, accounting for 11 per cent of the total GDP. The UAE is expected to generate an average annual growth rate of 33.5 per cent in its GDP from AI. 

Foreign direct investment in the Middle East’s AI sector is projected to grow by 20-25 per cent annually over the next 10 years and reach $30-35bn by 2030, according to The World Economic Forum.

Allocating large percentages of these investments to the field of agentic AI will place the Middle East at the forefront of technological innovation for the next decade at least.

Addressing the coming skills gap

Global concern of job displacement because of agentic AI is legitimate, but the Middle East’s approach involves a large focus on reskilling and upskilling its workforce. Countries like the UAE and Saudi Arabia are working hard to equip their citizens for the new era.

Consider that 42 per cent of Middle East CEOs are having trouble hiring for technology roles and that it is estimated by the World Economic Forum that 50 per cent of employees will need reskilling by 2025 and you can see the immediate need for wide-ranging reskill and upskill programmes.

The UAE’s National Program for Coders seeks to train 100,000 coders by 2026, but Saudi Arabia’s Human Capability Development Program seeks to develop skills for future jobs.

Emphasis on the development of human capital in the local workforce guarantees that as Agentic AI opens new opportunities, the local workforce will have the skill sets to perform these roles.

The Middle East should not only follow global trends in digital transformation but should also seriously consider becoming a global Agentic AI exporter. This region is uniquely positioned to bring important contributions to the global AI landscape which would redefine its position in the new world economy for decades.

The writer is the global chief transformation officer and CEO MEA at Quant.