META region’s AI spending may climb to $7B by 2026: report

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While developed regions of the globe are taking giant leaps with artificial intelligence (AI), a new report suggests that the Middle East, Turkey and Africa (META) could be the next frontiers for the emerging technology.

The report, a forecast from International Data Corporation (IDC), predicts that annual spending on AI by META could reach an impressive $7.2 billion before the end of 2026. Presently, the entire META region spends barely $3 billion on AI, giving IDC’s ambitious prediction a CAGR of 37% over a three-year period.

The market intelligence firm said it reached its submission by leaning on its extensive network of over 1,300 analysts and a survey of industry players in the regions in question. The leading drivers of growth in META will be the prospect of improving workplace productivity and efficiency by enterprises.

According to the IDC, it is easy to assume that large corporations may provide the largest adoption push, but the impact of micro, small and medium enterprises (MSMEs) should not be overlooked in the grand scheme of things.

A significant contributor to annual AI spending in the regions will be from government coffers in the quest to develop public utilities with the technology. Several countries in the region are already making sizable AI bets, with the Middle Eastern nations of Saudi Arabia and the United Arab Emirates leading the charge.

IDC’s report noted that the UAE’s government-backed AI initiatives could have a ripple effect on the entire META region, affecting net spending and overall adoption levels.

“The UAE is making significant investments in infrastructure and skills, promoting AI adoption, developing supporting guardrails, and fostering an indigenous AI ecosystem to raise its global AI competitiveness,” said Ranjit Rajan, IDC VP of Research for the META region.

A sizable portion of annual AI spending is expected to be deployed in training local populations on the technology to provide a talent pool for enterprises building AI solutions, added the IDC. Government AI spending in the regions will encompass infrastructure while a fraction of the sum will be earmarked for regulating the nascent industry and its service providers.

Nigeria has seized the opportunity to begin rolling out robust AI legislation, calling experts to lend their skill and expertise to the rulemaking process, with several African nations opting to follow suit. Countries in the region are keen on avoiding the pitfalls associated with the mishandling of digital assets leading to the increasing “cryptoization” of their local economies.

UAE’s AI efforts

Seeking to forge its own path, the UAE has developed its own localized large language models (LLMs) to grasp the intricacies of its culture without a blind reliance on AI models from the United States or Europe. One Amazon Web Services (AWS) (NASDAQ: AMZN) executive opined that the technical capabilities of the localized models have the potential to put the Middle East on the map in terms of AI innovation.

“Clearly, Falcon is part of the conversation around core foundational models,” said Kevin Miller, AWS Vice President for global data centers. “That alone tells you there’s a lot of capability in the Middle East to build game and world-changing technical capabilities.”

Turkey has since released an AI blueprint aimed at educating citizens and encouraging entrepreneurship with the technology, but infrastructure limitations continue to hinder the government’s objectives.

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