KSA generative ai market report Size, Share, Growth Drivers, Trends, Opportunities & Forecast 2025–2030

Saudi Arabia Generative AI Market Overview

• The Saudi Arabia Generative AI Market is valued at USD 230 million, based on a five-year historical analysis. This growth is primarily driven by the increasing adoption of AI technologies across sectors such as healthcare, finance, and education, as organizations seek to enhance operational efficiency, automate content generation, and improve customer engagement through advanced AI solutions .
• Key cities including Riyadh, Jeddah, and Dammam lead the market due to their robust digital infrastructure, concentration of skilled AI professionals, and substantial public and private investments in technology. Riyadh, as the capital, is a focal point for government-led AI initiatives, while Jeddah and Dammam benefit from their strategic economic roles and ongoing diversification efforts .
• The National Strategy for Data and Artificial Intelligence (NSDAI), issued by the Saudi Data and Artificial Intelligence Authority (SDAIA) in 2020, sets out a comprehensive framework to position Saudi Arabia as a global leader in AI. The NSDAI mandates initiatives for AI capability development, research and innovation, ethical AI governance, and investment attraction across sectors, with operational programs including the establishment of AI research centers, talent development, and smart city accelerators .

Saudi Arabia Generative AI Market Segmentation

By Component:The market is segmented into Software and Services. The Software segment includes applications and platforms leveraging generative AI technologies, while the Services segment comprises consulting, implementation, and support services provided by AI vendors. The Software segment currently leads the market, accounting for about 65% of revenue, driven by the surging demand for AI-powered applications in content creation, automation, and analytics across industries .

By Technology:The market is segmented into Generative Adversarial Networks (GANs), Transformers, Variational Autoencoders (VAEs), and Diffusion Networks. Transformers continue to dominate due to their versatility and superior performance in natural language processing and content generation, which are increasingly adopted by enterprises. Diffusion models are also gaining traction for their high-quality image and data generation capabilities, particularly in sectors such as healthcare, drug discovery, and creative industries .

Saudi Arabia Generative AI Market Competitive Landscape

The Saudi Arabia Generative AI Market is characterized by a dynamic mix of regional and international players. Leading participants such as stc Group (stc.AI), King Abdullah University of Science and Technology (KAUST), Saudi Data and Artificial Intelligence Authority (SDAIA), National Center for Artificial Intelligence (NCAI), Elm Company, ACWA Power (AI-driven energy solutions), Solutions by stc, Google Cloud AI, Microsoft Azure AI, IBM Watson, Amazon Web Services (AWS), NVIDIA, Adobe Inc., DataRobot, and C3.ai contribute to innovation, geographic expansion, and service delivery in this space .

Saudi Arabia Generative AI Market Industry Analysis

Growth Drivers

• Increasing Demand for Automation:The Saudi Arabian economy is projected to grow by 4.5% in future, driven by a surge in automation across various sectors. Industries such as manufacturing and logistics are increasingly adopting generative AI technologies to enhance operational efficiency. For instance, the Ministry of Industry and Mineral Resources reported that automation could reduce operational costs by up to 25%, making it a critical driver for businesses aiming to remain competitive in a rapidly evolving market.
• Government Initiatives and Funding:The Saudi government has allocated approximately $1.5 billion for AI initiatives as part of its Vision 2030 plan. This funding aims to foster innovation and support local startups in the generative AI space. The National Strategy for Data and Artificial Intelligence (NSDAI) emphasizes the importance of AI in diversifying the economy, with a target of creating 30,000 AI-related jobs in future, significantly boosting the market's growth potential.
• Rising Adoption of AI in Various Sectors:The healthcare sector in Saudi Arabia is expected to invest around $2 billion in AI technologies in future, reflecting a growing trend towards digital transformation. Hospitals and clinics are increasingly utilizing generative AI for diagnostics and patient management, which enhances service delivery. Additionally, sectors like finance and retail are also integrating AI solutions, contributing to a robust demand for generative AI technologies across the economy.

Market Challenges

• Data Privacy Concerns:With the implementation of AI technologies, data privacy remains a significant challenge in Saudi Arabia. The country is currently developing comprehensive data protection laws, which are expected to be finalized in future. The lack of established regulations may hinder the adoption of generative AI, as companies fear potential legal repercussions and reputational damage associated with data breaches, impacting overall market growth.
• Lack of Skilled Workforce:The generative AI sector in Saudi Arabia faces a critical shortage of skilled professionals. According to the Saudi Ministry of Education, only 20% of university graduates in technology-related fields possess the necessary skills for AI roles. This skills gap is projected to limit the effective implementation of AI solutions, as companies struggle to find qualified personnel to drive innovation and maintain competitive advantages in the market.

Saudi Arabia Generative AI Market Future Outlook

The future of the generative AI market in Saudi Arabia appears promising, driven by ongoing government support and increasing private sector investment. As the nation continues to diversify its economy, the integration of AI technologies across various sectors will likely accelerate. Furthermore, advancements in data analytics and machine learning are expected to enhance the capabilities of generative AI, leading to innovative applications that address local needs and challenges, fostering sustainable growth in the industry.

Market Opportunities

• Expansion in Healthcare Applications:The healthcare sector presents significant opportunities for generative AI, with an expected investment of $2 billion in future. AI-driven solutions can enhance patient care, streamline operations, and improve diagnostic accuracy, making this a lucrative area for growth and innovation in the Saudi market.
• Development of Smart Cities:Saudi Arabia's commitment to developing smart cities, such as NEOM, offers substantial opportunities for generative AI applications. These projects aim to integrate AI technologies for urban planning, traffic management, and resource optimization, creating a conducive environment for AI-driven innovations and attracting global tech partnerships.