AI spending surges in the GCC, but only 11% of firms see returns
Companies in the Middle East, particularly those in the GCC, are aligning with global trends in AI investments and project allocations. Yet, they are also facing the same challenges, as the returns on many projects seem elusive, and the time to recoup initial investments is stretching far longer than is usual for other tech projects.
A new report reveals that, although Gulf companies are investing millions in AI, few are seeing financial gains, highlighting a gap between executive enthusiasm and actual results.
According to research by McKinsey & Co., only 11 percent of businesses in the region are generating profits from their AI investments, mirroring global trends. The data points to ongoing challenges as firms strive to convert early AI experiments into lasting value.
A separate survey by Boston Consulting Group (BCG), which polled 1,803 C-suite executives from companies with annual revenues exceeding $100 million, found that approximately one-third plan to allocate more than $25 million toward AI initiatives this year. Within the Gulf Cooperation Council (GCC), approximately one in four companies anticipates matching that level of spending.
Investment momentum remains strong across industries. A Deloitte study published in October reported that 85 percent of organizations increased AI spending over the past year, and 91 percent plan to expand budgets again in 2025.
These investments are still not generating the expected returns. Most companies reported needing two to four years to recoup their AI investments, compared with the typical seven to twelve months expected for other technology projects.
Examining global headlines, agentic AI appears to be the current trend, and it has emerged as a priority for early adopters. Yet, the tech is not yet ready for enterprise usage, as only 10 percent of organizations using such tools report strong returns, and roughly one-third expect to wait three to five years before realizing substantial financial benefits.
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![H.E. Omar Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications [left] Anthony Nakache, Managing Director, Google MENA [right]](https://s3.eu-west-1.amazonaws.com/cdn.menatech.net/wp-content/uploads/sites/2/2025/10/Untitled-1200-x-800-px-3-768x512.jpg)
