GCC’s GenAI potential reaches $35 billion annually, says McKinsey
GenAI could be worth 1.7% - 2.8% of annual non-oil GDP in the GCC
#GCC #GenAI - A new research study from McKinsey & Company concludes that Generative AI could generate up to $35 billion per year in economic value across Gulf Cooperation Council (GCC) states, adding between 1.7% and 2.8% in value to non-oil GDP. However, only a few GCC organisations have been successful in scaling Gen AI effectively and extracting value from their investments. However, according to McKinsey, there are value realisers that stand out from the crowd, generating more than 5 percent of their earnings from GenAI.
SO WHAT? - McKinsey’s findings underscore both the enthusiasm for GenAI and the obstacles to realising its full potential across GCC markets. Due to the significant investment and proactive leadership in AI from governments in the region, positive sentiment for GenAI among organisations is riding high. Numerous survey’s announced over the past year have highlighted positive attitudes in public and private sectors, and willingness to invest in GenAI solutions. However, in practice most enterprises have yet to harness GenAI on an organisation-wide level and move beyond the use of third-party apps by individuals.
here are some highlights from McKinsey’s state of AI in the GCC report:
This month McKinsey & Company published a report titled: The state of gen AI in the Middle East’s GCC countries: A 2024 report card.
McKinsey estimates GenAI use cases could add $21 billion to $35 billion to the GCC’s annual non-oil GDP, contributing up to 2.8% annually.
Nearly 75% of GCC organisations already use GenAI in at least one function, compared to 65% globally.
57% of GCC organisations allocate over 5% of their digital budgets to GenAI, significantly higher than the global average of 33%.
The energy sector leads with potential gains of $5 to $8 billion, followed by capital projects, infrastructure, and financial services.
Only 10 companies among the surveyed generate over 5% of earnings from GenAI, characterised by their use of proprietary or highly customised models.
GCC companies prioritise GenAI in sales, marketing, and IT functions, where early returns on investment have been most evident.
Limited access to talent, decentralised data management, and risk management hurdles impede broader adoption and scaling.
Value realisers invest in dedicated GenAI leaders and agile operating models, critical for adapting AI workflows across functions.
Cybersecurity, compliance, and model accuracy remain top risks, with 66% of respondents prioritising cybersecurity in gen AI implementations.