The application of generative artificial intelligence (genAI) tools in GCC countries and companies could generate between $21 billion and $35 billion per year, according to the latest report published by McKinsey & Company.
The strategy consultancy’s research has estimated that the application of genAI to 63 use cases could generate global annual economic value worth between $2.6 trillion and $4.4 trillion, in addition to the $15 billion that other AI technologies, such as machine learning, advanced analytics and deep learning, could unlock.
As a result, genAI could amount to 1.7% to 2.8% of the annual non-oil GDP of GCC economies today. The value potential was most significant in the energy sector, where genAI could bring annual gains of between $5 billion and $8 billion, followed by capital projects and infrastructure and financial services.
Ahead of the AI curve
The report was the result of a collaboration with the GCC Board Directors Institute, in which researchers surveyed 140 executives from eight separate sectors in the region, asking about the state of genAI adoption within their organisations.
The survey demonstrated that GCC countries are ahead of the curve in genAI adoption. According to the report, 75% of leaders in the region said they had adopted genAI in at least one function of their business, compared to 65% globally. Another 57% said they were spending at least 5% of their digital budgets on AI, a much higher number than the 33% of the global survey. Half of the GCC survey respondents said their organisations had drawn up a road map to implement priority use cases more broadly, compared to 26% globally.
GCC organisations were also found to be mostly focusing their genAI implementation projects on functions likely to deliver the most value, including marketing, sales, software engineering and IT.
Embedding genAI at scale
Despite the technology’s great potential and the increase in its adoption in the region, McKinsey found that only a limited number of organisations have begun to scale genAI implementation and extract value from their investments. Only ten of the 140 survey respondents said their organisations were generating more than 5% of the company’s earnings from genAI, leaving “a sizable majority with substantial opportunities for growth”.
In McKinsey’s view, scaling genAI adoption requires”a fundamental rewiring of the organisation”. The company named five key areas that will be affected by this transformation: technology, data, talent, the operating model and risk management.
“A few GCC organisations have made a start”, the report stressed. “Others have much further to go. And while it is important to bear in mind that realising full value from gen AI investments won’t be instantaneous, the longer it takes to embark on such a transformation, the longer the rewards are likely to be elusive.”