The telecommunications sector is on the brink of a significant transformation driven by artificial intelligence (AI). With projected investments exceeding $5 billion by 2026, AI is poised to become the foremost driver of innovation and efficiency.

This panel discussion, chaired by Sam Evans, Senior Managing Director at FTI Delta, brought together leading experts to examine the role of AI in telecommunications, particularly in the Middle East.

Speakers

· Sam Evans, Senior MD - FTI Delta (moderator)

· Omar Al Zaabi, SVP of products and business development - e&

· Raphael Jouenne, chief strategy officer - center3

· Eng. Amjad Arab, chief wholesale and partnerships - Salam

Al Zaabi emphasised the rapid integration of AI into everyday life in the UAE, spanning education, business, and government sectors. "AI is becoming a lifestyle," he stated. The UAE government is playing a pivotal role by incorporating AI officers into various organisations, marking a transition from a "smart government to an AI government."

This commitment to AI adoption is a key driver in establishing the Middle East as a hub for AI technology. Jouenne pointed out that AI is not the only factor contributing to the region's digital transformation.

"Even without AI, we would still see significant growth due to digitisation, gaming, and online shopping," he explained. Saudi Arabia alone has over 20 million online shoppers, necessitating robust digital infrastructure.

However, AI accelerates this transformation, compelling telecom operators to expand and enhance their networks.

AI-driven traffic is increasing, but according to Al Zaabi, "it is still too early to size the impact of AI traffic on networks."

Hyperscalers are developing AI zones within cloud regions, but widespread AI adoption at scale is still in its early stages. He foresees "big waves coming" in AI traffic, necessitating proactive network planning.

Jouenne concurred, stating that while AI-driven traffic is rising, telecom investments take time to materialise. "We are seeing the start of increased traffic over AI infrastructure, but we must prepare today for future growth," he added.

Amjad provided a broader perspective on AI’s economic impact, citing McKinsey’s findings that generative AI adoption in business reached 33% in 2023 and was expected to double in 2024. He highlighted Saudi Arabia’s ambitious AI growth projections, with a compound annual growth rate (CAGR) of 32% by 2030.

"The global AI market is projected to reach $4.4 trillion, equivalent to Japan’s GDP," he noted, stressing the importance of partnerships and investments in data centres and connectivity to support AI expansion.

Addressing the region’s preparedness for AI-driven demand, Amjad acknowledged gaps in interconnectivity and infrastructure. "We need to work together—operators, silicon providers, and hybrids—to build a strong foundation," he stated. Competitive power pricing and land costs are crucial enablers for data centre expansion.

Al Zaabi outlined e&’s investment in submarine cables to support AI workloads, explaining that existing deployments use 8 to 24-fibre technology, while future investments may scale up to 32 or 48 fibres. "Latency is crucial. Without it, we cannot serve AI use cases effectively," he remarked, highlighting efforts to interconnect AI regions and enhance low-latency performance.

Jouenne echoed this sentiment, discussing center3’s approach to subsea and data centre connectivity. "Subsea cables and data centres must work in tandem to create a digital infrastructure fabric," he explained. He stressed the importance of reducing latency and ensuring seamless connectivity to support AI-driven applications. "Customers demand network fabrics, not just point-to-point connections," he added.

Beyond scalability, network resilience and diversity are paramount. Amjad corrected an earlier statement, clarifying that Saudi Arabia’s AI market is projected to grow at a CAGR of 32% by 2030, while public cloud adoption will increase by 23% by 2029.

He stressed the need for diversified infrastructure, with multiple submarine cable routes and terrestrial fibre networks ensuring continuity in case of disruptions. "Submarine cable cuts happen; without diverse routes, networks will be vulnerable," he cautioned.

The UAE’s infrastructure is well-developed, but Al Zaabi noted that ensuring low-latency connections across diverse routes remains a work in progress. "Diversity and low latency must be addressed simultaneously," he asserted.

Discussing AI’s impact on data centre requirements, Amjad identified three critical factors: power availability, land costs, and connectivity. "Without power, land, and fibre, a data centre is just an empty shell," he stated. Governments must support grid infrastructure and competitive pricing to enable AI-scale data centres.

Jouenne highlighted the shift towards AI-optimised data centres. "Greenfield facilities in Saudi Arabia are being designed specifically for AI workloads, with improved cooling and dense infrastructure," he explained.

However, legacy data centres may struggle to accommodate these new demands. "The region is well-positioned to address AI workloads due to lower power costs compared to mature markets," he observed.

Al Zaabi predicted a gradual evolution of AI workloads from centralised hubs to distributed edge data centres. "AI will start at major points and expand to local hubs as demand grows," he explained.

Amjad emphasised the importance of data localisation in supporting AI applications. "Salam launched a CDN initiative to encourage content providers to host their data in Saudi Arabia, reducing latency and enhancing data security," he shared. Government-led initiatives, such as Saudi Arabia’s PIF-backed Alat, further support AI growth by investing in industrial AI solutions.

The panel concluded with a discussion on regional cooperation. Jouenne emphasised that partnerships, rather than competition, would drive the Middle East’s emergence as a global AI hub. "Investment in digital infrastructure is significant and requires collaboration," he stated. He highlighted the need for best-of-breed partnerships that balance cost-effectiveness with technological leadership.

Addressing economic models for AI infrastructure, Jouenne noted that different players will adopt varied approaches based on their business models. "Cooling technologies and infrastructure densification are changing the economics of AI data centres," he explained. While the investment landscape is evolving, partnerships will be crucial in building sustainable AI-ready infrastructure.

The panel discussion underscored AI’s transformative role in telecommunications, particularly in the Middle East. While the region is making significant strides in AI adoption, challenges remain in network scalability, infrastructure readiness, and economic models.

The panellists highlighted key priorities: ensuring network diversity and resilience, investing in AI-optimised data centres, and fostering regional cooperation.

As AI traffic grows, telecom operators must proactively enhance their networks, leveraging partnerships to build a robust digital ecosystem. The Middle East’s strategic position, government support, and competitive advantages in power and connectivity position it as a potential global AI hub, provided these foundational elements are addressed effectively.

With AI set to drive unprecedented growth, industry stakeholders must collaborate to unlock its full potential, ensuring that the region remains at the forefront of technological advancement.