RIYADH – While the vast majority of local enterprises now view artificial intelligence as a critical strategic asset, Saudi AI adoption challenges—specifically a severe shortage of qualified talent—threaten to slow the transition from pilot programs to full-scale implementation.

According to the new State of Innovation and AI Survey released by Dell Technologies today, 96% of surveyed Saudi companies identify AI and Generative AI (GenAI) as a key component of their business strategy. However, the report highlights a significant disconnect between strategy and execution capability.

Key Takeaways

  • Universal Skills Gap: 100% of respondents believe their teams lack the necessary skills to fully leverage AI.
  • Strategy vs. Execution: While 96% view AI as strategic, 92% struggle to integrate it into all operations.
  • Security Fears: 68% of companies worry about exposing sensitive data to third-party AI tools.

The Talent and Infrastructure Divide

The report, which surveyed business and IT decision-makers including 50 from Saudi Arabia, reveals that 52% of local organizations are already seeing tangible financial and productivity returns from their initial AI investments. Despite these early wins, the path to scaling remains obstructed.

The most alarming statistic from the research is the skills gap. Every single respondent (100%) from Saudi Arabia indicated that their current workforce lacks the requisite skills to harness AI effectively. This concern has intensified specifically regarding GenAI, with 70% of organizations reporting insufficient knowledge in this rapidly evolving sector.

Beyond human capital, infrastructure readiness poses a significant barrier. Many organizations report that their existing IT environments cannot handle the high processing demands of AI workloads. Challenges cited include a lack of AI-optimized hardware (CPUs/GPUs) and difficulties integrating new AI solutions with legacy systems. Consequently, 40% of businesses remain in the early-to-mid stages of their adoption journey.

Cybersecurity and Data Sovereignty

As Saudi enterprises rush to innovate, cybersecurity remains a primary hesitation. The pressure to adopt AI is often counterbalanced by the risks associated with data privacy.

The survey found that 68% of Saudi companies fear that using third-party AI tools could lead to the exposure of sensitive corporate data or intellectual property. Furthermore, 76% of organizations stated that striking a balance between rapid innovation and mitigating cybersecurity risks is a persistent operational challenge.

Aligning AI with Sustainability

Despite the operational hurdles, the report identifies a positive trend in utilizing AI for sustainability. Saudi organizations are increasingly leveraging AI to optimize energy efficiency, such as smarter data center management and minimizing idle workloads.

Approximately 88% of respondents emphasized the importance of external collaboration to achieve these circular IT solutions. This suggests a growing ecosystem where enterprises rely on partners to navigate the complexities of building infrastructure that balances high-performance computing with environmental responsibility.