Saudi Arabia’s Tech Sector Poised for $4 Billion Profit Boost by 2028 Through GenAI Adoption

Saudi Arabia’s technology sector could see a surge in operating profits by SR15 billion ($4 billion) by 2028, driven by the adoption of generative artificial intelligence (GenAI), according to a new report from Strategy& Middle East, a global consulting firm.

The analysis suggests that with the successful development and commercialization of new GenAI use cases — alongside advancements in hardware and infrastructure — tech companies in the Kingdom could achieve a 15 percentage point increase in profit margins.

In line with its Vision 2030 ambitions, Saudi Arabia is rapidly advancing its goal of becoming a leading regional technology hub. The Saudi Data and Artificial Intelligence Authority (SDAIA), established in 2019, is spearheading this transformation to position the Kingdom as a global leader in data-driven innovation.

Adding momentum to these efforts, Riyadh will host the third Global AI Summit from September 10 to 12. The event will focus on the ethical development of AI and its applications across key sectors such as transportation, urban design, mental health, and resource management.

Transformative Impact Across Key Sectors

Hani Zein, Partner at Strategy& Middle East, highlighted that GenAI’s impact is expected to ripple across all sectors. "Our analysis shows that telecom, media and entertainment, and technology sectors stand to gain the most in margin growth by embracing GenAI," he said.

He emphasized that the evolving GenAI landscape presents an ideal opportunity for companies to rethink their strategies and explore new pathways for growth and innovation.

The report further notes that GenAI could significantly boost research and development capabilities, streamline solution design, and automate the entire lead-to-cash lifecycle. These efficiencies could cut operational costs by up to 30 percent for tech firms, while fostering the creation of local intellectual property — crucial for Saudi Arabia’s vision of building a new generation of national tech champions.

"GenAI can serve as a powerful catalyst, accelerating Saudi Arabia’s technological transformation and unlocking major growth opportunities," added Fawaz BouAlwan, Partner at Strategy& Middle East.

Sector-Specific Growth Projections

The media and entertainment sector is expected to achieve a 14 percentage point margin growth by 2028, potentially raising its operating profit by SR6 billion. GenAI is anticipated to drive this growth by enabling the creation of original Arabic content, hyper-personalizing customer experiences, and enhancing operational performance.

The report also highlights that with Saudi Arabia's relatively low advertising spend per capita — currently up to SR240 — there is significant potential to better monetize audiences, further cementing the Kingdom’s emergence as a regional media and entertainment powerhouse.

Meanwhile, the telecom sector could see a 12 percentage point margin uplift, translating to an additional SR11 billion in operating profit by 2028. GenAI is expected to help telecom operators differentiate their offerings and overcome challenges related to monetization and competitive price pressures.

Strategic Adoption Critical for Success

Ali Ghaddar, Principal at Strategy& Middle East, stressed the need for companies to adopt a value-driven approach when integrating GenAI. "Success lies beyond technological innovation," he said. "It requires aligning GenAI initiatives with business goals, conducting rigorous cost-benefit analyses, and ensuring organizational readiness."

He also emphasized the importance of a phased rollout, governed by strong operational frameworks and clear metrics to guide successful GenAI adoption.