If someone told you that for every dollar you invest today, you’ll receive $10 in 2030, what would you do?

Well, this is the return which Strategy& forecasts the GCC will make for every $ they invest in generative AI today. And Strategy& believe their estimates are conservative, the upside could be even more.

Therefore, it is no surprise that investment in generative AI is booming in the UAE. For example, earlier this year, Abu Dhabi’s Technology Innovation Institute (TII) launched Falcon LLM, an open-source large language model (LLM) that has since outperformed ChatGPT in training efficiency. Overall Strategy& forecasts the UAE stands to gain more than $5 billion between now and 2030.

Generative AI has burst into our lives and is here to stay.

Our research finds that one in five people in the UAE have used ChatGPT in the last month, putting it ahead of Wikipedia usage. A remarkable rise for a website that only launched in November last year.

Unsurprisingly, the number of ChatGPT users jumps even higher when you look at the 16-24 age bracket, where 42% have used it in the last month. A fact that may cause teachers and university professors some concern when marking essays.

The increasing use of advanced AI tools leads to other unexpected challenges. For example, running ChatGPT daily uses up 564 MWh of energy. This amount of energy could power over 26,000 American homes for a year. If Google used AI for its 9 billion daily searches, it would consume 29.2 TWh of power annually. That's as much as the entire yearly electricity usage of Ireland.

Whilst ChatGPT has become the torchbearer for AI, generative AI is just one subset of AI.

As the UAE’s Minister of Artificial Intelligence Omar Al Olama told Time Magazine in his recent interview, “AI is not one technology, and each technology has a different utility. Self-driving cars are very different to large language models. The first problem when it comes to governing AI or looking at the future of AI is people actually bucket them all as one technology and think that we have one answer for everything there.”

The UAE has been especially proactive in the artificial intelligence space. The country launched its first National Strategy for Artificial Intelligence 6 years ago and was the first in the world to create a government ministry specifically for AI. Or as Sam Altman, Chief Executive of OpenAI, said during a talk at Hub71 in June, the UAE “has been talking about AI since before it was cool”.

Technology is a national obsession in the UAE.

With 9.38 million individuals connected online, the UAE boasts an internet penetration rate of 99.0%, which makes it a world leader. To put that in perspective, this is 1.5 times greater than the global average, which stands at 64.5%.

Even more staggering is the sheer number of mobile phones. There are currently 19.05 million active mobile connections. This means there are nearly 2 mobile connections for every individual, which is almost triple the global average, which stands at a modest 0.69 per person.

Our research indicates that across the UAE, 47% of people identify artificial intelligence as the most exciting emerging technology. This number jumps to 57% when you ask residents of Dubai. Yet, despite this, less than 1% of respondents to a KPMG/GEMS survey of schoolchildren aged 15-18 in the UAE said they planned to study computer science or artificial intelligence.

Business is racing to integrate AI.

According to a May 2023 PwC survey, published in Gulf Business, 65% of business leaders in the UAE said that their organizations are already using AI in day-to-day operations. 81% of UAE’s chief executives believe in the critical capabilities of AI in their organization’s overall approach to cybersecurity. More than 8 in 10 young professionals in the UAE indicate that AI tools will function as an “invisible teammate” at work. The areas seeing the most substantial AI-driven shifts include data analytics, customer interactions, predictive modeling, and cloud infrastructure.

At the GITEX technology summit in Dubai this year, a flurry of significant AI collaborations took center stage. G42, an Abu Dhabi-based AI and cloud services provider, announced a partnership with OpenAI, the brains behind ChatGPT. Together, they aim to boost generative AI applications in areas such as energy, healthcare, finance, and public services. In a similar vein, Du, a national telecom provider, is collaborating with Amazon to integrate AI into their consumer services. E&, another prominent telecom operator, launched the world’s first autonomous telecom store powered by AI. Meanwhile, Microsoft introduced its innovative virtual assistant, Mai, and is looking to team up with both the UAE government and private entities to improve the chatbot's functionalities.

Business investment is likely to continue for the foreseeable future. PwC’s Annual Survey of CEOs found that 66% of companies in the MENA region will be making further investments in AI over the next 12 months.

These investments are based on sound judgment. Around the world, companies that are early adopters of AI have significantly improved productivity. A recent McKinsey study notes that AI-equipped businesses have seen an increase in their EBIT margin of between 5-15%.

Looking ahead

For the UAE, the future is incredibly bright. According to PwC, AI innovations could contribute a whopping $96 billion of the UAE's total economy by 2030, accounting for 13.6% of its total GDP.

For workers, the influence of AI will be widespread and is likely to be felt sooner rather than later. A LinkedIn survey conducted in August found that 67% of employees believe that artificial intelligence will bring significant changes to their work within the next 12 months.

For the innovators who successfully leverage the new technology, the economic gains could be substantial. Just look at OpenAI: previously valued at $29 billion in April, it is now looking to raise new capital at a valuation of $80-90 billion, according to the Wall Street Journal.

Strategically, the UAE is gearing up to be a forerunner in the global AI race. At this year's GITEX summit, Al Olama stressed to the international tech community the need for robust governance as AI adoption grows. Under the direction of the Ministry of Artificial Intelligence, the government has mapped out eight clear objectives, focused on enhancing AI infrastructure, improving regulatory agility, and fostering international research partnerships.

One of the country’s ultimate aims, according to HH Sheikh Mohammed bin Rashid Al Maktoum, is to “become the world's most prepared nation for Artificial Intelligence." From the looks of it, they seem to be on the right track.

If interested in reading more of Manara Global's fortnightly newsletter, you can subscribe here.