Productivity gap stalls computing returns in the Middle East

The region's countries have invested billions of dollars in data centers and high-performance computing, but the real productivity return remains far removed from the server rooms. World Bank estimates in a recent report indicate that Saudi Arabia and the United Arab Emirates have secured two spots among the top 25 nations worldwide in technology infrastructure and artificial intelligence, yet this rise faces a harsh practical test inside corporate offices and factories.

The main paradox identified by the report lies in the huge gap between consuming models and adapting them to core business. While the technology can raise productivity by up to 20 percent of regional jobs without an immediate threat of full automation, the overwhelming majority of companies still limit use to visual content creation and routine text. Data from Jordan alone reveal the scale of this imbalance: 96 percent of tech firms employ AI to generate content, whereas more than 95 percent have failed to integrate a single algorithm into their operational processes and supply chains.

This focus on superficial uses has caused the region's markets to fall behind in innovation indicators compared with competing emerging economies.Only 16 percent of regional companies launched a new product or service in the past three years, versus 29 percent in peer markets.The disparity in investment in productive assets persists, with regional companies' share not exceeding 24 percent compared with roughly 37 percent globally, while less than five percent of firms have invested in formal AI training for their staff.

The crisis deepens when examining the data on which advanced solutions are built. Arabic accounts for only 1 percent of the total training data for global models, even though the language has more than half a billion speakers. This explicit gap produces models that suffer from low accuracy and overlook common contexts and dialects, making reliance on them for investment decisions and supply-chain management fraught with technical flaws and additional costs.

For technology leaders in the Gulf, Egypt and the Levant, an operational reality demands a rethink of budget allocations: building computing capacity alone is no longer sufficient to justify spending unless it is tied to precise local business models and clear data governance. This landscape calls for a shift toward embedded and small-scale AI solutions, low-cost tools with limited processing requirements that demonstrate value directly in agriculture, healthcare and logistics, rather than draining resources on massive models that do not understand the regional work environment.

The next competition no longer revolves around processor capacity or chip count, but around possessing talent capable of safeguarding knowledge assets and turning operational processes from mere text-generation interfaces into genuine production engines.