Overcoming challenges in the GCC’s tech ecosystem

Overcoming challenges in the GCC’s tech ecosystem

Short Url

Artificial intelligence is well on its way to becoming a transformative force in the Gulf Cooperation Council area. The pace has been further accelerated by the rise of generative AI, which is projected to be a $24 billion market in the GCC by 2030.

However, the region’s stakeholders will need to play catch-up to unlock AI’s full potential. A range of factors must be in place to create a thriving AI ecosystem that supports innovation. Currently, the region faces obstacles in three areas.

First, while the GCC has seen significant funding commitments in AI infrastructure across connectivity, data centers, and cloud, it must accelerate progress, especially in data centers, where supply trails total demand by more than 40 percent.

For example, the market for high-performance computing data centers in Saudi Arabia alone is projected to grow from $200 million to $300 million by 2030.

To accommodate higher-density requirements, data centers around the world are undertaking HPC fit-outs using specialized chips. The resulting supply shortage threatens to impede growth. Indeed, the lead time for chip orders in the region is two years.

Second, GenAI uses foundational large language models trained on publicly available data to generate insights. The real value may lie in training these LLMs on an organization’s own datasets.

However, companies typically must undertake a series of time-consuming steps — including, in some cases, reinforcement learning from human feedback — to make raw data usable.

An additional hurdle involves concerns about global regulations on data privacy, access, and copyright. Consider that 27 percent of organizations around the world have banned the use of GenAI altogether.

Third, GCC tech companies seeking to scale up face a talent gap. To date, they have found it difficult to attract specialized tech talent for roles such as machine learning engineers, cloud architecture designers, and data scientists.

The region’s universities are producing competitive graduates, but most companies still source talent from global tech hubs such as Bangalore, London, and Silicon Valley.

Beyond lucrative salaries, these candidates have become accustomed to packages that include equity-linked compensation, flexible working policies, and values-based recruitment. GCC companies have yet to embrace these practices, putting them at a disadvantage.

Elevating the region’s AI ecosystem will require targeted action by the region’s private and public sectors across these three areas.

The AI landscape is evolving quickly, fueled by seemingly continuous advancements in GenAI. The GCC could be well positioned to capture its share of the market.

Prateek Chauhan, Diana Dib, Chady Smayra & Hani Zein

GCC tech champions must adopt an interoperable infrastructure that seamlessly connects both Eastern and Western technologies to ensure adaptability, scalability, and resilience in an ever-evolving tech landscape.

They could address chip shortages either by sourcing from alternative vendors or using cloud services that offer graphic processing units “as a service.”

Companies also need to strengthen their data privacy measures to give customers confidence in how data is handled — for instance, by building gateway LLM architectures that use enterprise datasets in a secure and effective way.

Regional tech leaders can bridge talent gaps through global acquisitions and deploy low-code, no-code, and generative-code tools to empower a broader talent pool.

Meanwhile, regional governments can help remove obstacles to the ecosystem’s development. To ensure the GCC has the necessary infrastructure, they could craft policies and incentives supporting investment in critical hardware and the establishment of HPC data centers to meet local demand.

Regional governments could also aggregate national data and make it available for companies to train and fine-tune LLMs.

Given broader concerns about the accuracy and reliability of AI models, regional policymakers must take a holistic approach to regulating the use of AI. They will need to strike a balance among competing priorities.

For example, setting policies and frameworks that govern data privacy, copyright, and Internet protocol without stunting innovation in AI application development could improve the ability of both local tech champions and the region to promote adoption.

One path would be for government leaders to participate in setting global tech and AI standards rather than simply following them.

Last, they could reimagine the education ecosystem, from K-12 to university, to produce a sufficient supply of data scientists, experts, and tech leaders.

The AI landscape is evolving quickly, fueled by seemingly continuous advancements in GenAI.

The GCC could be well positioned to capture its share of the market — if private companies and public sector leaders can move forward collaboratively and with a sense of urgency to support growth and innovation.

Prateek Chauhan is principal, and Diana Dib, Chady Smayra, and Hani Zein are partners at Strategy& Middle East, part of the PwC network.

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view

Israel forces close UN schools in annexed east Jerusalem

Israel forces close UN schools in annexed east Jerusalem
Updated 10 sec ago
Follow

Israel forces close UN schools in annexed east Jerusalem

Israel forces close UN schools in annexed east Jerusalem
JERUSALEM: The UN agency for Palestinian refugees said Thursday that Israel closed three of its schools in annexed east Jerusalem, months after an Israeli ban on its activities took effect.
An AFP photographer at the scene reported that a closure notice in Hebrew was left at the entrance of at least one of the schools, and UNRWA said at least one of its staff members was detained.
“From May 8, 2025, it will be prohibited to operate educational institutions, or employ teachers, teaching staff or any other staff, and it will be forbidden to accommodate students or allow the entry of students into this institution,” the closure order read.
UNRWA’s director in the West Bank, Roland Friedrich, told AFP that “heavily armed” forces surrounded three UNRWA schools in east Jerusalem’s Shuafat camp at 9:00 am on Thursday.
Friedrich added that 550 pupils aged six to 15 were present when the closure was enforced, calling the event “a traumatising experience for young children who are at immediate risk of losing their access to education.”
Friedrich said that police were being deployed at three separate schools in other parts of east Jerusalem.
The Palestinian Authority condemned the move in a statement to AFP, calling it “violation of children’s right to education.”
Israel claims all of Jerusalem as its “indivisible” capital, though the United Nations considers its annexation of the city’s eastern sector illegal.
The Palestinians see east Jerusalem as the capital of their future independent state.

Osaka inspired by Agassi’s comeback as she embraces clay court grind

Osaka inspired by Agassi’s comeback as she embraces clay court grind
Updated 1 min 18 sec ago
Follow

Osaka inspired by Agassi’s comeback as she embraces clay court grind

Osaka inspired by Agassi’s comeback as she embraces clay court grind
  • “I’m okay playing on Court 16 if I have to anyways. The reason I came back wasn’t to play on center courts all the time, it’s because I really enjoy the game“
  • Osaka beat Slovenia’s Kaja Juvan 6-1 7-5 last week in the final of the L’Open 35 de Saint-Malo

Four times Grand Slam champion Naomi Osaka said this year’s clay court swing feels different as she enters it with momentum, having picked up wins and confidence in the recent weeks.
Osaka beat Slovenia’s Kaja Juvan 6-1 7-5 last week in the final of the L’Open 35 de Saint-Malo, a WTA 125 tournament, to win her first clay-court title at any level. It was also her first WTA title since becoming a mother in July 2023.
“I wanted to rack up experience on clay. I didn’t really have too much of an ego playing that tournament,” Osaka told reporters after defeating wild card Sara Errani 6-2 6-3 in the first round of the Italian Open on Wednesday.
“I’m okay playing on Court 16 if I have to anyways. The reason I came back wasn’t to play on center courts all the time, it’s because I really enjoy the game.”
Osaka said her decision to drop down to play in Saint-Malo was inspired by American great Andre Agassi, who rebuilt his career in the late 1990s by competing on the ATP Challenger Tour.
“I remember reading (Agassi’s) book. There was a moment where... he was saying he was flipping his own scoreboards. Someone came and yelled, ‘Image is everything!’ I would say that section of the book crossed my mind more,” she said.
The former world number one has often struggled on clay, having never gone past the third round at the French Open, where she is set to feature in the main draw later this month. Osaka plays ninth seed Paula Badosa in the Italian Open on Thursday.
“I feel like clay is very strength-reliant,” Osaka said.
“It’s something that I prioritized this year and I think it’s working. I’m going to keep pushing forward that way. I’ll let you know what happens in Roland Garros.”


Bayern’s Kompany ready to catch some z’s after Bundesliga title win

Bayern’s Kompany ready to catch some z’s after Bundesliga title win
Updated 7 min 39 sec ago
Follow

Bayern’s Kompany ready to catch some z’s after Bundesliga title win

Bayern’s Kompany ready to catch some z’s after Bundesliga title win
  • The Belgian, in his first season at the club, said the constant preoccupation with the next match during the season did not really allow him to really enjoy the simple pleasures

BERLIN: Bayern Munich coach Vincent Kompany wants nothing more than a good night’s sleep after his team won the Bundesliga title last week with two matches left to play.
The Belgian, in his first season at the club, said the constant preoccupation with the next match during the season did not really allow him to really enjoy the simple pleasures.
“Sleep, really sleep,” Kompany said in a club interview when asked what he was most looking forward to after the title win.
“You constantly have the pressure of the next game. You achieve something but then you have to start building for the next achievement.”
It was by no means an easy domestic season for Bayern and Kompany, with the club facing stiff competition from last year’s champions Bayer Leverkusen, who also eliminated the Bavarians in the German Cup.
Bayern were also eliminated by Italy’s Inter Milan in the Champions League quarter-finals.
“Sometimes you have these moments with the family during the year, but then your head is somewhere else,” Kompany said.
“Now in the next few weeks I will leave some of that behind. But you can only do that after winning.”


US Fed sees rising risks to economy as it leaves rates unchanged

US Fed sees rising risks to economy as it leaves rates unchanged
Updated 21 min 33 sec ago
Follow

US Fed sees rising risks to economy as it leaves rates unchanged

US Fed sees rising risks to economy as it leaves rates unchanged

WASHINGTON: The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the US economic outlook as its policymakers grapple with the impact of President Donald Trump’s tariffs.

At this point, Fed Chair Jerome Powell said, it isn’t clear if the economy will continue its steady pace of growth, or wilt under mounting uncertainty and a possible coming spike in inflation.

With so much unsettled about what Trump will ultimately decide and what of that survives possible court and political battles, “the scope, the scale, the persistence of those effects are very, very uncertain,” Powell said in a press conference at the end of a two-day policy meeting.

“So it’s not at all clear what the appropriate response for monetary policy is at this time ... It’s really not at all clear what it is we should do,” he said, adding: “I don’t think we can say which way this will shake out.”

It was Powell’s subtle way of saying the US central bank, a key actor in shaping the economy, was effectively sidelined until Trump’s sweeping policy agenda takes full effect.

The Fed’s policy statement, which held the benchmark overnight rate steady in the 4.25 percent-4.50 percent range, noted that since the central bank’s last meeting in March “uncertainty about the economic outlook has increased further,” and that risks were increasing that both inflation and unemployment could increase.

Thomas Simons, chief US economist at Jefferies, said the language downplayed just how much disruption had occurred since the Fed’s March 18-19 meeting, and how unpredictable the outlook had become.

“All of the ‘Liberation Day’ tariff news, the April 9 announcement of a 90-day delay, the back and forth on trade deals and tariff exemptions in the headlines, and the resultant negativity expressed in business and consumer surveys make it impossible to judge what the economic outlook is, let alone whether the skew of risks around it has changed,” Simons wrote, calling Powell “predictably noncommittal” given the situation.

Risks to dual mandate

The Fed’s statement, and much of Powell’s comments to reporters as well, vouched for the economy’s continued resilience, with job gains continuing and the economy still growing at a “solid pace.”

The recently reported decline in gross domestic product in the first quarter, Powell said, was skewed by a record rush of imports as businesses and households tried to front-run expected import taxes, with measures of domestic demand still growing. But even that data demonstrated the dilemma facing the Fed. The rush of front-loading to buy goods and stock shelves won’t likely be repeated, and it

is unclear whether underneath it all demand and investment are starting to weaken — and how that will eventually express itself in “hard” data on inflation and jobs. The Fed’s own “Beige Book” of anecdotal reports about the economy recently gave a dour picture of suspended business deals, falling demand, and rising prices.

“Businesses and households are concerned ... and postponing economic decisions of various kinds,” Powell said. “If that continues and nothing happens to alleviate those concerns, you would expect that to show up in economic data.” The Fed can’t respond, however, until it is clear which way the economy pivots, and how it assesses the risks to its two goals of holding inflation to 2 percent and sustaining maximum employment.

“The current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments,” Powell said, affirming a wait-and-see approach that has become the central bank’s calling card in the first months of the Trump administration.

US stock prices extended gains after the release of the Fed’s unanimous policy decision and ended higher on the day. Treasury yields fell, while the dollar gained against a basket of currencies.

Holding pattern

The direction of Fed policy will depend on which of the job and inflation risks develop, or, in the more difficult outcome, whether inflation and unemployment increase together and force the central bank to choose which risk is more important to try to offset with monetary policy.

A weaker job market would typically strengthen the case for rate cuts; higher inflation would call for monetary policy to remain tight.

“For the time being the Fed remains in a holding pattern as it waits for uncertainty to clear,” said Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, adding that “recent better-than-feared jobs data has supported the Fed’s on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle.”

The Fed’s policy rate has been unchanged since December as officials struggle to estimate the impact of Trump’s tariffs, which have raised the prospect of higher inflation and slower economic growth this year.

When policymakers last updated their economic and policy projections in March, they anticipated reducing the benchmark rate by half a percentage point by the end of this year. 


Oil Updates — prices edge up on US-China trade talk hopes

Oil Updates — prices edge up on US-China trade talk hopes
Updated 35 min 58 sec ago
Follow

Oil Updates — prices edge up on US-China trade talk hopes

Oil Updates — prices edge up on US-China trade talk hopes

TOKYO: Oil rose on Thursday after falling more than $1 in the previous session, supported by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.

Brent crude futures were up 10 cents, or 0.2 percent, at $61.22 a barrel, while US West Texas Intermediate crude rose 13 cents, or 0.2 percent to $58.20 a barrel at 9:32 a.m. Saudi time.

“Optimism around the US and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said independent market analyst Tina Teng.

“Signs of a de-escalating trade war improved market sentiment, triggering a rebound in oil prices in an oversold market.”

US Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. The countries are the world’s two largest economies and the disruptions from their trade dispute are likely to lower crude consumption growth.

US President Donald Trump on Wednesday suggested China initiated the trade talks, adding he was not willing to cut US tariffs on Chinese goods to get Beijing to negotiations. Bessent said the upcoming talks are a start, not ‘advanced’ discussions.

Weak demand concerns capped oil price gains after the Federal Reserve held interest rates steady but warned about rising economic uncertainties.

“The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the US dollar, which added to headwinds facing the broader commodity markets,” said ING analysts in a report on Thursday.

A stronger US currency makes dollar-denominated oil more expensive for holders of other currencies and dampening demand.

Adding to the concerns of weaker demand, US gasoline inventories rose last week, stoking concerns among analysts that consumption is not building as the US enters the summer demand period later this month.

At the same time, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will increase its oil output, adding to pressure on prices.