GenAI is on the rise in the Middle East with large-scale adoption and year-on-year spend, New Lenovo Research Finds

Lenovo research recently launched highlights that businesses are investing increasing amounts of cash in artificial intelligence (AI) technology, with spending expected to grow by 43% year-on-year in 2024.

The new IDC eBook, sponsored by Lenovo, ‘CIO PlayBook 2024: It’s all About Smarter AI’*, found that 40% see AI as a ‘game changer’. While generative AI may have sparked the current AI boom, all forms of AI are reaping the benefits. An equal proportion of investment is being directed to generative AI (with 25% of investment) as interpretative AI (25%) and machine learning (25%).

Generative AI is being actively incorporated into company strategies, processes and offerings in the Middle East. 64% of companies in the Middle East have actively invested in GenAI while 34% are currently planning to invest as well. AI adoption in the Middle East is quite high, with 65% built, with 27% buying and 14% having it embedded. However, 57% has also raised that it is extremely difficult to recruit into AI-related positions.

Giovanni Di Filippo, EMEA President of Lenovo Infrastructure Solutions Group, says, “We are at a point where AI is becoming a reality for organisations in every territory and every sector. CIOs are eagerly embracing the potential of not only generative AI, but also interpretative AI, and will have to make the right tech investments and partnerships to maximise AI value for their organisations.”

Alaa Bawab, General Manager, Lenovo Infrastructure Solutions Group (ISG), Middle East and Africa, added, “AI is at the front lines of technological growth today and becoming a reality across all verticals. Being a cornerstone of digital transformation, adoption of AI is becoming the standard, evident by the high adoption rate in the region. While it does come with its challenges, it is vital that CIOs should further not only the adoption rate of AI, but also encourage learnings of AI capabilities withing themselves and company-wide.”

How different verticals are investing

Intrigue for AI varies across industries, although most agree on its potential. Manufacturing companies are most excited, with 47% hailing AI as a ‘game changer’. Telecommunications companies are least excited of those surveyed (22%), with leaders in the sector already having invested significantly in AI in recent years.

A majority of companies in every industry have already invested in generative AI, with half (50%) of government organisations having done so, climbing to 65% in the telco sector and 67% in banking, financial services and insurance (BFSI). Across sectors, there is also a wide recognition of the importance of edge computing in AI, with organisations in every vertical having increased investment, up 29% in manufacturing and 60% in the telco sector.

AI in different territories

Enthusiasm for AI varies across the EMEA region, the research found, with respondents in France (58%) and the Netherlands (56%) most likely to label AI as a ‘game changing’ technology, while respondents in the Middle East were least likely to do so (30%). Over 90% of respondents had either invested in generative AI or planned to do so within the coming year, with Italian companies most likely to have already invested (68%) and Danish companies most likely to be planning to do so (64%).

• In Middle East there is a 43% rise in planned AI spending for 2024 compared to 2023. This trend is similar to organisations in North America (NA) (62%), but shows substantially higher growth than businesses in Asia/Pacific (AP) (45%).
• In Middle East, eagerness for AI is high, but is still forward-looking: a considerable proportion of CEOs and IT leaders see AI as a potential ‘game changer’, with 30% while 66% consider it as a hygiene factor. The Middle East region has been considerably quick to adopt generative AI, with 64% of organisations having invested, compared to the 57% of organisations in EMEA. The trend shows continued growth with 64% of organisations planning to invest.
• The study showed that organisations in the Middle East emphasised the importance of a higher customer experience and satisfaction, with a focus on driving digital business innovation and cost optimization as top business priorities.
• The study also showed that in the Middle East, talent and workforce management are the most impacted by AI tech and business area, followed closely by natural language processing, chatbots and overall intelligent automation and robotics.

Challenges of generative AI adoption

The biggest technology challenge of generative AI was the high dependence on third parties, as well as the monitoring for potential misuse or AI hallucinations. The model capability of GenAI has also posed an active challenge in its adoption.

The region also anticipates digital transformation, business continuity and disaster recovery as challenges for 2024 along with the evolving regulatory landscape. Other challenges include recruitment, employee job security and an overall lack of training for self-use.