Generative AI (GenAI) could significantly reshape every sector in Saudi Arabia, with early adopters securing a decisive competitive advantage, says new research conducted by Strategy& Middle East, part of the PwC network.
“Advancements in GenAI are expected to impact all sectors in Saudi Arabia. Our analysis indicates that the telecom, media & entertainment, and technology sectors could achieve the highest potential margin upside by adopting GenAI. This presents a prime opportunity for companies to reassess their strategies and explore new avenues for growth and innovation,” said Hani Zein, Partner with Strategy& Middle East.
Technology
The technology sector in Saudi Arabia stands to gain the most from leveraging GenAI. The sector could achieve an operating profit margin of 15 percentage points by 2028, increasing its operating profit by up to SR15 billion ($4 billion).
Saudi tech firms can realise this growth by developing and commercialising new use cases and meeting demand for the advanced hardware and infrastructure needed for GenAI. Companies can also leverage this technology to accelerate their R&D capabilities, streamline solution design, and automate the internal lead-to-cash lifecycle, reducing costs by up to 30%.
“These efforts can help to accelerate the development of local intellectual property and solidify Saudi Arabia’s position as a hub for national tech champions. GenAI can be the essential catalyst in accelerating this transformation, creating major growth opportunities, and enhancing internal capabilities,” said Fawaz BouAlwan, Partner with Strategy& Middle East.
Media & Entertainment
The media and entertainment sector in Saudi Arabia could achieve a margin growth of 14 percentage points by 2028, increasing its operating profit by up to SR6 billion. Media and entertainment firms can attain this growth by utilising GenAI to develop more original Arabic content, hyper-personalise customer experiences, and boost operational capabilities.
With an advertising spending per capita of just up to SR240 in Saudi Arabia, the research also suggests there is considerable potential to better monetise their customer base. This would further accelerate the transformation of the kingdom as a media and entertainment hub, aligned with its national agenda.
Telecoms
The kingdom’s telecoms market could achieve a margin growth of 12 percentage points by 2028, increasing its operating profit by up to SR11 billion. Telcos can leverage GenAI to gain deeper insights into broadband customers, tailor their value propositions, and improve broadband infrastructure utilisation, which currently stands at around 50% for fiber-to-the-home (FTTH) in Saudi Arabia. By analysing customer behaviour, telcos can also hyper-personalise campaigns, accelerating ICT cross-selling to SMEs and capturing an opportunity projected to reach SR10 billion by 2028.
GenAI will further support telecom operators to better differentiate themselves versus competition and navigate challenges around monetisation and price wars. This includes developing highly sophisticated customer segmentations, synthesising customer insights, and generating customised product portfolios to address segment needs.
“To successfully embrace GenAI, companies must adopt a value-driven approach that delivers tangible benefits beyond technological innovation. This begins with synchronising GenAI initiatives to business goals, performing thorough cost-benefit analyses, and driving operational readiness throughout the organisation. A phased rollout, governed by strong operational guardrails and tracked by precise measurement, will be crucial,” said Ali Ghaddar, Principal with Strategy& Middle East