Saudi Firms See AI Gains Amid Tech, Skills, and Cyber Gaps

Saudi Arabia’s businesses are experiencing a turning point in their AI journey, yet challenges remain in technology, workforce skills, and cybersecurity. According to Kyndryl’s second annual Readiness Report, which surveyed 3,700 senior leaders across 21 countries, organizations in the Kingdom are seeing returns from AI, but foundational gaps in infrastructure and talent are slowing the pace of scaled innovation.

While 63% of Saudi organizations feel increasing pressure to show ROI from AI investments, more than half admit their projects stall after the proof-of-concept stage. Issues in existing technology stacks are cited by 53%, highlighting the difficulty of moving beyond experimentation.

Despite these hurdles, confidence in AI’s potential remains strong. Nearly all respondents (94%) say keeping up with rapid technological change is a struggle, and one in three note the complexity of their IT environments hampers scaling efforts. At the same time, alignment between business and technology teams remains a challenge for 26% of organizations.

AI’s impact on the workforce is becoming tangible. Over 90% of leaders anticipate significant job transformations within the next year, yet 31% are concerned about reskilling employees whose roles evolve. Cognitive and technical skill gaps, reported by 35% of respondents, could limit AI adoption if not addressed.

Cybersecurity has also emerged as a top concern. Three-quarters of Saudi organizations experienced cyber-related outages in the past year, but fewer than 40% have implemented robust cybersecurity measures. Infrastructure upgrades, cited by 33%, remain crucial to mitigate risks and enhance resilience.

Regulatory and policy factors are shaping technology strategies. Almost 30% of organizations report compliance concerns as barriers to technology investments. Cloud strategies are being reevaluated, with 67% of leaders worried about geopolitical risks in global cloud environments. In response, 50% are investing in data repatriation, 28% are reassessing vendors, and 31% are shifting to private cloud models.

Saudi Arabia’s business landscape reflects a delicate balance: momentum from AI innovation, countered by structural, skills, and security gaps. Organizations face the dual task of scaling AI while ensuring infrastructure, workforce, and compliance readiness to sustain long-term growth.