One in four companies in the Gulf Cooperation Council (GCC) is planning to invest more than $25 million in artificial intelligence by 2025, according to a recent study by the Boston Consulting Group (BCG). This finding aligns with a broader trend, as one in three companies globally intends to allocate a similar amount to AI this year.

Leading organizations in the GCC are prioritizing their AI investments in two main areas: transforming core business functions and developing new AI-driven business models. The transformation aims to enhance efficiency in existing operations, while the creation of new models seeks to offer services that were previously unattainable without AI technology.

A significant 81% of GCC companies are set to boost their technology investments in 2025, with 72% ranking AI/GenAI among their top three strategic priorities. Breaking it down by country, 88% of executives in Qatar, 72% in the UAE, and 69% in Saudi Arabia regard AI/GenAI as a critical focus, compared to a global average of 73%.

In the region, 66% of executives anticipate that AI will enhance productivity. However, they acknowledge the necessity for current workforce talent to adapt to the demands of AI implementation. The survey highlighted a positive outlook regarding workforce retention, with only 7% of executives in the Middle East expecting job cuts due to AI automation, which is slightly lower than the global average of 8%.

The GCC’s approach emphasizes practical applications of AI rather than limited testing. To successfully implement AI, organizations are increasingly adopting the “10-20-70 principle,” which allocates 10% of resources to algorithms, 20% to data and technology, and 70% to people, processes, and cultural transformation. This principle underlines the importance of not just technology but also the necessary organizational and cultural changes for AI success. In the UAE, for instance, 27% of organizations have trained over a quarter of their workforce on AI tools. A statement noted that while the UAE leads in AI workforce development in the region, other GCC countries are also recognizing the importance of employee upskilling to fully leverage AI’s potential.

As the GCC continues to advance in AI adoption, executives are also mindful of the associated risks. Key concerns include data privacy, security, the lack of control over AI decision-making, and regulatory issues, which reflect similar worries on a global scale. Addressing these risks is essential for the ethical and practical integration of AI technologies.

Robert Xu, Managing Director and Partner at BCG X, emphasized a significant shift in how GCC organizations are approaching AI. He noted that the focus has moved from selective implementation to a comprehensive integration of AI across all roles and processes. This shift highlights the commitment to preparing a workforce capable of thriving in a rapidly changing job market.

To maximize returns on their substantial AI investments, forward-thinking GCC organizations are concentrating on strategic value creation rather than merely acquiring technology. This evolution signifies a more mature approach to digital transformation in the region.

The most successful companies in the GCC are following a three-tiered strategy: first, using AI for immediate productivity gains; second, reshaping crucial business functions for efficiency; and finally, developing new AI-powered business models for enduring competitive advantages. This strategy requires leadership that challenges conventional thinking, focusing resources on transformative opportunities rather than spreading them too thinly across myriad projects.

The region’s most innovative firms understand that the success of AI hinges on the effective integration of technology with organizational readiness. By balancing system architecture, data strategy, and human factors such as upskilling and cultural adaptation, these companies are establishing a foundation for sustainable competitive advantages in an increasingly AI-driven global economy. Dr. Lars Littig, Managing Director and Partner at BCG, remarked that while many regions engage in short-term AI experiments, the GCC is adopting a long-term perspective. He noted that the high investment levels are not merely for immediate gains but reflect a deeper understanding of AI’s long-term socioeconomic impact.