Technology and artificial intelligence (AI) are powering massive changes in the Middle East and Kuwait is one of several nations at the forefront of the race toward innovation.
The global AI market was valued at $28.34 billion last year, and it has shown no signs of pumping the brakes anytime soon.
Meanwhile, Kuwait’s Information and Communications Technology (ICT) market hit $22.48bn in 2023. It could reach $39.83bn by 2028, a compound annual growth rate (CAGR) of 9.84 percent.
Kuwait is hoping AI and big data will drive economic growth. The country has developed an environment where start-ups thrive from sandbox to marketplace.
Investment in AI start-ups has quadrupled since 2020, reflecting the sector’s astonishing growth over the years. The growth has caught the eye of multinationals in the local market.
Almost three-quarters of of them are already planning to use AI to gain an edge over their competition, while 62% of local businesses believe it is crucial to their operations.
These figures align with Kuwait Vision 2035. The vision is to develop a digital-first nation of smart cities while boasting an economy that leverages the AI-assisted benefits of Industry 4.0.
Over-reliance on energy revenue is a common theme in the Middle East, but Kuwait is open to diversification. Read on as we look at three sectors which could help them achieve their goal.
iGaming
The global iGaming industry has become a multi-billion-dollar market with plenty of room for more growth, and Kuwait must put aside its reservations and tap into this digital goldmine.
The market was valued at approximately $70bn in 2022, surging to $85.62bn by the end of 2023. It reached $97bn in 2024 and is projected to hit $125.6bn by 2027.
With a tech-savvy population, Kuwait is well-positioned to take advantage of this burgeoning industry and create a new revenue stream, but cultural and religious beliefs are a stumbling block.
Gambling is prohibited under Kuwaiti law, but they may need to shift their stance to bolster their options in terms of diversifying their economy away from the oil sector.
The United Arab Emirates (UAE) have already embraced the iGaming sector, and tech plays a huge role, with casino lovers able to make deposits and withdrawals through blockchain and cryptocurrency.
Their newfound gambling landscape operates within a heavily regulated environment, and Kuwait could follow their blueprint.
Even though gambling is prohibited in the country, real money online casinos in Kuwait are still operating, although they’re regulated by foreign operators.
If they create a formal framework for iGaming, the Kuwaiti government could channel the tax revenue to boost their economy and protect their citizens from unregulated platforms.
Entertainment Cities
Entertainment cities are large-scale projects that combine elements of leisure, retail, culture and cutting-edge tech to offer immersive experiences, and they are becoming a common theme in the Middle East.
Saudi Arabia and the UAE have successfully used entertainment cities to draw the attention of international tourists, and Kuwait could follow in their footsteps.
Several smart city initiatives are already underway in Saudi Arabia, including NEOM, Riyadh Smart City and Jeddah Economic City.
Masdar City, Zayed Smart City Project, The Sustainable City, Dubai Silicon Oasis, Dubai South District, Desert Rose City and Sharjah Sustainable City are some of the most notable smart cities in the UAE.
One of the most compelling aspects of these cities is the use of innovative tech such as augmented reality (AR), virtual reality (VR) and AI to make sure visitors get the best experience.
For example, an entertainment city in Kuwait could feature VR-based historical tours that bring the nation’s rich heritage to life.
The prospect of entertainment cities could also allow Kuwait to create a smart tourism ecosystem that leverages Internet of Things (IoT) to offer visitors top-notch services.
For this to work, Kuwait needs to establish a robust infrastructure and learn from the experience of neighbouring countries that have taken up similar projects.
eSports
The eSports industry has developed into a global juggernaut and is capable of generating billions in revenue for the Kuwaiti economy.
Professional gaming has become popular in the Middle East, with the young population particularly captivated by the genre.
Combine that with high use of the internet and increasing investment, and the result is a gaming infrastructure poised for explosive growth in the near future.
Kuwait has a chance to jump on the bandwagon and could even establish the country as a leading eSports hub in a couple of years, giving Saudi Arabia and the UAE a run for their money.
Developing a world-class eSports arena and hosting major international tournaments is one way to go about it.
Going down that route will attract fans from all over, as well as foreign investment, lucrative media deals and merchandise sales – the economic impact would be fantastic for Kuwait.
Kuwait could also nurture grassroots talent by establishing eSports academies and training centres.
These initiatives will help aspiring players hone their skills by training them in game design, streaming and digital marketing, fostering a well-rounded gaming ecosystem.
With the rise of platforms such as Twitch and YouTube Gaming, Kuwait also has an opportunity to grow its content creation industry. Supporting local streamers and influencers could amplify Kuwait’s digital presence, which could also aid the long-term goal of diversifying the economy.
