You are here

  • Home
  • Saudi Arabia’s technology sector could gain $4bn from GenAI by 2028: report

Saudi Arabia’s technology sector could gain $4bn from GenAI by 2028: report

Saudi Arabia’s technology sector could gain $4bn from GenAI by 2028: report
Saudi Arabia aims to position itself as a regional technological hub. Shutterstock
Short Url

https://arab.news/pnk4z

Updated 04 September 2024
Nirmal Narayanan
Follow

Saudi Arabia’s technology sector could gain $4bn from GenAI by 2028: report

Saudi Arabia’s technology sector could gain $4bn from GenAI by 2028: report
  • Kingdom will host the third Global AI Summit in Riyadh from Sept. 10 to 12
  • Media and entertainment sector in Saudi Arabia is projected to achieve a 14 percentage point margin growth by 2028
Updated 04 September 2024
Nirmal Narayanan
Follow

RIYADH: Saudi Arabia’s technology sector could see an increase in operating profit of SR15 billion ($4 billion) by 2028 with the adoption of generative artificial intelligence, a new report showed. 

An analysis by global consulting firm Strategy& Middle East suggests that a 15 percentage point margin growth is attainable if tech companies develop and commercialize new GenAI use cases and meet the demand for advanced hardware and infrastructure. 

Aligned with its Vision 2030 goals, Saudi Arabia aims to position itself as a regional technological hub. The Saudi Data and Aritifical Intelligence Authority, established in 2019, is driving this agenda to elevate the Kingdom as a global leader in data-driven economies. 

The Kingdom will host the third Global AI Summit in Riyadh from Sept. 10 to 12, focusing on ethical AI development and its applications in various sectors, including transportation, urban design, mental health, and resource management. 

Hani Zein, partner with Strategy& Middle East, said: “Advancements in GenAI are expected to impact all sectors in Saudi Arabia. Our analysis indicates that the telecom, media and entertainment, and technology sectors could achieve the highest potential margin upside by adopting GenAI.” 

He added: “This presents a prime opportunity for companies to reassess their strategies and explore new avenues for growth and innovation.” 

The report highlighted that GenAI will enhance research and development capabilities, streamline solution design, and automate the lead-to-cash lifecycle for tech firms, potentially reducing costs by up to 30 percent. 

“These efforts can help to accelerate the development of local intellectual property and solidify Saudi Arabia’s position as a hub for national tech champions,” said Fawaz BouAlwan, partner with Strategy& Middle East. 

“GenAI can be the essential catalyst in accelerating this transformation, creating major growth opportunities, and enhancing internal capabilities,” he added. 

The analysis said that the media and entertainment sector in Saudi Arabia is projected to achieve a 14 percentage point margin growth by 2028, increasing its operating profit by up to SR6 billion. 

The report underscores GenAI’s potential to boost original Arabic content creation, hyper-personalize customer experiences, and enhance operational capabilities. 

“With an advertising spending per capita of just up to SR240 in Saudi Arabia, the research also suggests there is considerable potential to better monetize their customer base,” the report said. “This would further accelerate the transformation of the Kingdom as a media and entertainment hub, aligned with its national agenda.” 

The telecom sector is expected to achieve a 12 percentage point margin growth by 2028, raising operating profit by up to SR11 billion. 

The report added that GenAI is anticipated to help telecom operators differentiate themselves and navigate challenges related to monetization and price wars. 

“To successfully embrace GenAI, companies must adopt a value-driven approach that delivers tangible benefits beyond technological innovation,” said Ali Ghaddar, principal with Strategy& Middle East. 

“This begins with synchronizing GenAI initiatives to business goals, performing thorough cost-benefit analyzes, and driving operational readiness throughout the organization,” he also. said. 

Ghaddar emphasized the importance of a phased rollout, governed by strong operational guardrails and precise measurement, for successful implementation.

Topics: Saudi Arabia technology artificial intelligence (AI) main Strategy& Middle East

Related

Saudi-Singaporean ties to strengthen in sustainability, SMEs, and manufacturing
Business & Economy
Saudi-Singaporean ties to strengthen in sustainability, SMEs, and manufacturing
Nissan to launch two more SUVs in Saudi Arabia after unveiling all-new 2025 Patrol
Business & Economy
Nissan to launch two more SUVs in Saudi Arabia after unveiling all-new 2025 Patrol

Saudi local content projects valued at $213bn by Q3 2024, says Alkhorayef

Saudi local content projects valued at $213bn by Q3 2024, says Alkhorayef
Updated 20 November 2024
MOHAMMED AL-KINANI
Follow

Saudi local content projects valued at $213bn by Q3 2024, says Alkhorayef

Saudi local content projects valued at $213bn by Q3 2024, says Alkhorayef
Updated 20 November 2024
MOHAMMED AL-KINANI

JEDDAH: The value of projects under Saudi Arabia’s local content initiatives has reached approximately SR800 billion ($213 billion) by the third quarter of 2024, according to the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef.

Speaking at the ongoing second edition of the Local Content Forum in Riyadh, themed “Partnerships for Sustainable Growth,” Alkhorayef revealed that Saudi Arabia’s share of local content in government procurement has increased from 33 percent in 2020 to 47 percent by the third quarter of 2024.

The minister, who also serves as chairman of the Local Content and Government Procurement Authority, added that the authority has focused on encouraging target sectors to adopt and prioritize local content, improving governance in government procurement processes, and enhancing efficiency in this area.

Established in 2018, the LCGPA is responsible for developing and overseeing policies and regulations, fostering local opportunities, promoting transparency, and utilizing national purchasing power. In collaboration with both public and private sectors, its mission is to strengthen local content in the national economy and improve government procurement processes.

The second edition of the forum builds on the success of the first, offering new opportunities for knowledge exchange, experience sharing, and raising awareness about the enablers, mechanisms, and policies of local content.

During his speech, Alkhorayef emphasized the critical role of the LCGPA in advancing local content, which he described as a cornerstone of Saudi Vision 2030.

He highlighted local content as both a brilliant concept and a key innovation introduced by Vision 2030. Alkhorayef noted that local content has received consistent attention since its inception, with Crown Prince Mohammed bin Salman underscoring its national importance in his meetings.

The initiative has now become integral to national strategies and government actions, receiving recognition at local, regional, and international levels.

The minister further stated that the authority’s success is a result of a shared belief in the importance of local content. To maximize its impact, the authority has established and activated over 380 local content teams across various entities to ensure proper implementation and compliance with policies.

Alkhorayef also mentioned that the authority has supported national factories by adding 1,100 new products to the mandatory list, directing nearly SR87 billion in national spending toward local products from early 2022 through Q3 2024.

Additionally, the number of factories producing items on the mandatory list has increased by 1,437, reaching a total of approximately 6,100, an 8 percent growth rate—surpassing the 5 percent growth rate of all factories in the Kingdom. This growth has generated over 42,000 new job opportunities in the past three years, supporting the Kingdom’s efforts to empower national talent and create sustainable employment.

Alkhorayef also highlighted the authority’s success in signing 50 agreements to localize industries and transfer knowledge in key sectors such as transportation, logistics, medical supplies, pharmaceuticals, and water. These agreements are expected to contribute over SR47 billion to the country’s gross domestic product.

The minister emphasized that the benefits of local content extend beyond economic outcomes, contributing to stronger local capabilities, enhanced national security against global challenges, improved supply chain resilience, and increased foreign investment and technology transfer to the Saudi market.

He reiterated that achieving the shared national goal of advancing local content requires the collective effort of all sectors, affirming that the LCGPA is working at an accelerated pace with national entities to realize this goal and fulfill the Kingdom’s aspirations.

In his address during the forum, Faisal Al-Ibrahim, minister of planning and economy, emphasized the importance of knowledge transfer for local content.

He remarked: “Today we may produce a simple product, but tomorrow there will be multiple simple products, and over time, more complex products will be built on them. This accumulated knowledge sustains long-term economic diversification.”

Al-Ibrahim noted that Saudi Vision 2030’s core objective is to diversify economic growth by fostering an environment conducive to developing competitive products and services for global markets. He emphasized that local content is essential for the economy’s resilience and its ability to address future challenges.

In a panel discussion titled “Future Directions of Local Content in the Context of Saudi Vision 2030,” Al-Ibrahim explained that increasing exports will help diversify sources of growth, aiming for expansion beyond oil and public finances. This strategy will drive private sector growth, support small and medium-sized businesses, and create sustainable jobs.

Investment Minister Khalid Al-Falih also participated in the forum, asserting that the Saudi economy “should be, and is, part of an integrated global economy.”

He noted that globalization is here to stay, despite evolving supply chain dynamics and country-to-country connections. Al-Falih stressed that Saudi Arabia is targeting foreign investment to reach 5.7 percent of the total economy, aiming for a market worth over SR6 trillion by 2030, equating to nearly SR388 billion in investment.

Highlighting the local economy’s importance, Al-Falih pointed out that Saudi Aramco has become a global hub for knowledge and technology transfer. He also noted SABIC’s success in building a vast petrochemical industry in Saudi Arabia through partnerships with foreign investors and mentioned Ma’aden’s expanding global presence.

Ahmed Al-Zahrani, assistant minister of energy for development and excellence, discussed the role of the country’s energy sector localization committee, chaired by Energy Minister Prince Abdulaziz bin Salman and deputized by Alkhorayef.

Al-Zahrani emphasized the committee’s mission to promote localization and ensure stable supply chains within the energy sector. He highlighted a research and development program in collaboration with over 14 government and private entities, including Aramco, ACWA Power, SABIC, and several universities.

The goal, he said, is to ensure the sustainability of localization from research and development through innovation to the final product.

Topics: Local content SaudiVision2030 GDP

Closing Bell: Saudi main index closes in red at 11,867 

Closing Bell: Saudi main index closes in red at 11,867 
Updated 20 November 2024
Nadin Hassan 
Follow

Closing Bell: Saudi main index closes in red at 11,867 

Closing Bell: Saudi main index closes in red at 11,867 
Updated 20 November 2024
Nadin Hassan 

RIYADH: Saudi Arabia’s Tadawul All Share Index declined on Wednesday, shedding 7.99 points, or 0.07 percent, to close at 11,867.92.

The total trading turnover of the benchmark index was SR4.78 billion ($1.27 billion) with 88 of the listed stocks advancing, while 141 declined.  

Saudi Arabia’s parallel market Nomu, however, gained by 0.98 percent to 29,859.11.  

The MSCI Tadawul Index marginally slipped 0.49 points to close at 1,491.34. 

The best-performing stock of the day was Al-Baha Investment and Development Co., with its share price increasing by 7.14 percent to SR0.30.  

Fawaz Abdulaziz Alhokair Co.’s share price rose by 8.29 percent to SR14.10, while Development Works Food Co.’s stock surged by 6.85 percent to SR131. 

Conversely, Saudi Chemical Co. recorded the biggest drop, falling 2.90 percent to SR9.71. 

On the parallel market, the top performer was Dar Almarkabah for Renting Cars Co., with its share price surging 15.45 percent to SR50.80. 

Saudi Investment Bank announced the launch of its US-denominated additional tier 1 capital sustainable sukuk under its sukuk program. 

In a statement to Tadawul, the bank revealed the appointment of Alistithmar for Financial Securities and Brokerage Co., Citigroup Global Markets Limited, HSBC Bank, and JP Morgan Securities as joint lead managers.  

It also appointed Goldman Sachs International, MUFG Securities EMEA plc, Arqaam Capital Limited, and Standard Chartered Bank as bookrunners. 

The offering, available to eligible investors in Saudi Arabia and internationally, commenced on Nov. 20 and is scheduled to close on Nov. 21. 

With a minimum subscription of $200,000, the sukuk will be perpetual and callable after five years. 

Saudi Investment Bank’s share price rose 2.65 percent to SR13.58. 

Knowledge Tower Trading Co. has announced a board resolution to transfer from the parallel market to the main market, subject to market approval and fulfillment of all regulatory requirements.  

Following the announcement, the company’s share price saw a significant increase of 7.20 percent, closing at SR10.90 

Topics: Closing Bell Saudi Stock Exchange (Tadawul)

Related

Closing Bell: Saudi main index closes in green at 11,876
Business & Economy
Closing Bell: Saudi main index closes in green at 11,876
Closing Bell: Saudi benchmark index edges up to close at 11,830
Business & Economy
Closing Bell: Saudi benchmark index edges up to close at 11,830

Tourism seen as key to advancing global climate action, UN official says

Tourism seen as key to advancing global climate action, UN official says
Updated 20 November 2024
Reem Walid
Follow

Tourism seen as key to advancing global climate action, UN official says

Tourism seen as key to advancing global climate action, UN official says
Updated 20 November 2024
Reem Walid

RIYADH: Tourism presents a significant opportunity to advance global climate action, said a senior UN official, urging nations to integrate tourism into climate policies. 

Speaking in Baku, Nigar Arpadarai, COP29 UN Climate Change high-level champion, emphasized the need for countries to integrate tourism into national climate policies, highlighting Azerbaijan’s progress in implementing this approach. 

This comes on the back of a 2019 UN report showing a 60 percent rise in transport-related emissions from tourism between 2005 and 2016, which accounted for 5 percent of global CO2, with projections for a 25 percent increase by 2030.  

“Climate change threatens parts of the tourism industry. Tourism is, therefore, an opportunity for both development and enhanced climate action,” Arpadarai said. 

“Azerbaijan has advanced sustainability within its own tourism strategy. Building on its experience, the COP29 Presidency is focused on promoting sustainability and resilience in tourism, and we are urging countries to integrate tourism into national climate policy,” she added.  

Arpadarai called on parties to join in this effort by signing the COP29 Declaration on enhanced action and tourism. 

She further noted that Tourism Day aims to lay the foundations for a holistic approach to sustainable tourism. 

“We encourage all stakeholders to join in this effort as we consider solutions to this key pillar of growth and development,” Arpadarai added. 

Also speaking during the same conference, Kanan Gasimov, head of the administration at Azerbaijan’s State Tourism Agency, highlighted how the COP29 host is leading efforts to integrate climate considerations into its tourism policies. 

“We are committed to driving meaningful change. Tourism is not only a key pillar of our economy but also deeply tied to our rich culture and natural heritage,” Gasimov said. 

“We now understand that the future of our destinations depends on the sustainability of our actions today,” he added. 

Gasimov also noted that through initiatives like the Baku Declaration, Azerbaijan is determined to position tourism as a force for positive climate impact, both within the country and globally. 

“With the momentum we’ve built at COP29, I’m confident that we can achieve transformative change,” he said. 

Zorista Urosevic, executive director of UN Tourism, who also attended the conference, emphasized that tourism, recognizing its vulnerability to climate change and its impact on ecosystems, is committed to adopting low-carbon, climate-resilient models aligned with sustainable development goals. 

“The launch of the Baku Declaration on enhanced climate action in tourism, promoted by the COP29 presidency, underscores this commitment,” she said. 

“Over 50 governments endorsed the Baku Declaration in the last 20 days as well as some non-state stakeholders, and it is planned to continue collecting endorsements until and before COP30,” Urosevic added. 

COP29 represents a pivotal moment in global climate negotiations, particularly for the Global South. 

Developing nations are poised to continue their fight for substantial climate finance, robust adaptation strategies, and equitable policy outcomes within the framework of common but differentiated responsibilities, based on the respective capabilities of nations.   

Expectations are high as delegates discuss topics including carbon emissions reduction, sustainable development, and the integration of climate resilience into national policies. 

Topics: COP29 Green & Blue

Saudi CMA seeks feedback on foreign investment and market access reforms

Saudi CMA seeks feedback on foreign investment and market access reforms
Updated 20 November 2024
Nadin Hassan
Follow

Saudi CMA seeks feedback on foreign investment and market access reforms

Saudi CMA seeks feedback on foreign investment and market access reforms
Updated 20 November 2024
Nadin Hassan

RIYADH: Saudi Arabia’s Capital Market Authority is seeking to attract more foreign investments and improve market accessibility by inviting feedback on proposed amendments to account procedures.

The proposed changes aim to align the Kingdom’s capital market with global regulatory and technological advancements, making it easier for local and international investors to open accounts.

The body is looking for feedback on the proposals, which also include opening doors for non-profit organizations and endowment funds to invest, diversifying the base.

The consultation period will last for 30 days, ending on Dec. 20.

Key changes include the introduction of a new category allowing individual foreign investors residing in the Gulf Cooperation Council countries to invest in shares listed on the Saudi main market directly.

“As global markets continue to expand and evolve, the next phase necessitates enhancing the international presence of the Saudi capital market and increasing its appeal to investors across the region,” according to data revealed by CMA to Arab News.

The data also highlighted that, in practical terms, the CMA has been working to remove regulatory challenges and develop mechanisms to foster the growth of foreign investments in the Saudi capital market.

This comes as the CMA also seeks public feedback on amendments to investment fund regulations particularly in the retail market. The changes aim to improve protections for retail investors, building on the 2021 rule that allowed individual investments up to SR200,000 ($53,245).

Previously, these investors were limited to trading in the debt market, the parallel market Nomu, investment funds, and derivatives, with their main market involvement restricted to swap agreements through capital market institutions.

The proposed amendments will provide these investors with direct access to the main market, potentially attracting more foreign capital, enhancing liquidity, and supporting the local economy.

The CMA is also seeking to simplify the process for opening and operating investment accounts for various types of capital market institution clients.

This includes easing the requirements for endowments, further broadening the investor base, and enhancing access to the Saudi market.

These reforms reflect the Kingdom’s ongoing efforts to modernize its capital market, making it more inclusive, competitive, and appealing to local and international investors.

The CMA is enabling former residents of Saudi Arabia and the GCC to retain access to the market even after relocating, boosting investor confidence.

The authority’s proposal also opens doors for non-profit organizations and endowments to invest, diversifying the investor base.

According to CMA’s data to Arab News, by the end of the first half of 2024, the value of foreign ownership in the capital market had reached SR402.43 billion, increasing by approximately 5.6 times since Dec. 2015, the year foreign investment was first allowed in the Saudi capital market.

In Dec. 2015, the value was SR72.15 billion, reflecting the various facilitations provided by the market, which contributed to attracting these investments.

“The Saudi Market continues to develop regulatory frameworks and supportive laws to attract foreign investments, promote inclusion in global indices, and offer attractive investment opportunities for international investors,” CMA’s data emphasized.

Through adopting various strategic initiatives, the aim is to diversify the investor base and participants in the market, helping the Saudi capital market to become a leading regional and global financial hub.

On Nov. 13, CMA approved its largest regulatory overhaul to date for the sukuk and debt instruments market, marking a significant step in the country’s financial sector development.

The newly approved changes introduce key amendments to the rules on the offer of securities and continuing obligations, particularly related to the issuance of debt instruments.

These adjustments simplify prospectus requirements for public, private, and exempted offerings, streamlining the process and reducing regulatory burdens.

The changes will take effect as soon as they are published and are designed to attract a wider range of issuers and foster deeper investment in the market.

Topics: Capital Market Authority (CMA)

Related

Saudi Arabia’s CMA approves regulatory changes to strengthen debt market
Business & Economy
Saudi Arabia’s CMA approves regulatory changes to strengthen debt market
Saudi stock market rises to 7th globally in size, says CMA chief
Business & Economy
Saudi stock market rises to 7th globally in size, says CMA chief

OPEC chief tells COP29 oil is a gift from God

OPEC chief tells COP29 oil is a gift from God
Updated 20 November 2024
Reuters
Follow

OPEC chief tells COP29 oil is a gift from God

OPEC chief tells COP29 oil is a gift from God
Updated 20 November 2024
Reuters

BAKU: OPEC Secretary-General Haitham Al-Ghais on Wednesday told the COP29 climate summit in Baku that crude oil and natural gas were a gift from God, and that global warming talks should focus on cutting emissions not picking energy sources.

His words echoed those of Azerbaijan President Ilham Aliyev, who used his opening address to the summit to hit back at Western critics of his country’s oil and gas industry, and also described those resources as a gift from God.

“They are indeed a gift of God,” Al-Ghais said in a speech at the conference.

“They impact how we produce and package and transport food and how we undertake medical research, manufacture, distribute, medical supplies. I could go on forever.”

He said that world governments, which agreed to limit planetary warming to 1.5 degrees Celsius above pre-industrial levels at the 2015 summit in Paris, could achieve their climate targets without shunning petroleum.

“The focus of the Paris Agreement is reducing emissions, not choosing energy sources,” he said.

OPEC has said that technologies like carbon capture can tackle the climate impact of burning fossil fuels.

Mohamed Hamel, secretary-general of the Gas Exporting Countries Forum, a grouping of gas exporter nations, also spoke to the conference on Wednesday in support of fossil fuels.

“As the world’s population grows, the economy expands, and human living conditions improve, the world will need more natural gas, not less,” he said.

He added that he hoped that a COP29 deal on international climate finance would allow support for natural gas projects to help countries transition away from dirtier fuels like coal.

“The outcome of COP 29 should facilitate financing for natural gas projects and scaling up cleaner technologies such as carbon capture, utilization and storage,” he said.

“This is crucial for ensuring just inclusive and orderly energy transitions that leave no one behind.”

Climate scientists say the world is now likely to cross the 1.5 degrees Celsius threshold — beyond which catastrophic climate impacts could occur — in the early 2030s, if not before.

The world is currently on track for as much as 3.1 Celsius of warming by the end of this century, according to the 2024 UN Emissions Gap report.

Topics: COP29 Green & Blue

Latest updates

Zelensky says Crimea can only be restored to Ukraine through diplomacy
Zelensky says Crimea can only be restored to Ukraine through diplomacy
India’s Modi offers aid to Caribbean nations while meeting leaders in Guyana
India’s Modi offers aid to Caribbean nations while meeting leaders in Guyana
US gathers allies to talk AI safety as Trump’s vow to undo Biden’s AI policy overshadows their work
US gathers allies to talk AI safety as Trump’s vow to undo Biden’s AI policy overshadows their work
US Senate blocks bid to halt some Israel military sales
US Senate blocks bid to halt some Israel military sales
LPGA Tour sets another record with $127.5m in prize money for 2025
LPGA Tour sets another record with $127.5m in prize money for 2025

Search form

Print Edition
Read pdf version Subscribe now
© 2024 SAUDI RESEARCH & PUBLISHING COMPANY, All Rights Reserved And subject to Terms of Use Agreement.