How AI is Reshaping Customer Experience in the Gulf: The GCC's AI Boom with Mohamed Ameer

Mohamed Ameer analyzes GCC AI agent adoption, growth drivers, and the unique blend of global tech and local talent solving regional challenges

The GCC's AI revolution is not just about adopting global technology, but about solving a uniquely regional equation: blending world-class platforms with local expertise to conquer the critical challenges of dialect, data, and regulation.

In this interview, we spoke with Mohamed Ameer, Country Sales Director at Exotel and an expert at the forefront of conversational AI in the Gulf. He breaks down the rapid acceleration of AI agents across banking, telco, and government sectors, revealing the key drivers behind the region's projected multi-billion dollar market growth.

We delve into the real-world hurdles, from the 35% error rate in understanding Arabic dialects to the complexities of data sovereignty, that define success and failure in the field. Ameer also provides a clear-eyed view of the funding landscape, the hybrid model that attracts investment, and the critical KPIs that convince GCC procurement teams to move from pilot to production.

Interview with Mohamed Ameer

How fast is the adoption of AI agents and conversational bots across key GCC sectors (banking, telco, government, retail), and which sector is currently driving the most commercial growth?

Adoption of AI agents and conversational bots is accelerating rapidly in the GCC, particularly in high-volume, low-ticket B2C customer bases. Banking, e-commerce (retail), and telco sectors are leading the charge, driven by the need for 24/7 support and handling high inquiry volumes. Government adoption is more vision-driven, focusing on enhancing citizen experiences rather than immediate commercial gains.

Across industries, implementations are primarily motivated by cost reduction (about 75%) or improved brand perception and building (25%). Retailers, for instance, have reported a 30% drop in support costs through precise product guidance via bots. The key driver remains the cost per interaction: traditional handling ranges from $1 to $1.8, while bots can reduce this to $0.2 to $0.5, yielding significant savings. Overall, the GCC conversational AI market is projected to grow from $324.6 million in 2024 to $2.185 billion by 2033 at a CAGR of 23.6%, with banking and telco sectors fueling the most commercial growth due to their scale and investment in AI for customer engagement.

What are the biggest technical and operational challenges local companies face when deploying AI agents at scale in the GCC (language/localization, dialects, latency, cloud sovereignty, integrations, data quality)?

The primary technical challenge is handling local languages, especially regional Arabic dialects, where even top TTS (text-to-speech) and ASR (automatic speech recognition) systems show up to 35% word error rate (WER) accuracy. Arabic localization remains underdeveloped, complicating intent detection and natural interactions. Data localization adds further complexity, as most GCC countries prohibit processing or storing data outside their borders, and local cloud infrastructure is still maturing. This leads to issues like latency, jitter, and integration challenges when relying on cloud-based systems.

Operationally, the biggest hurdle is data quality: training data is often incomplete, unstructured, or inaccurate, leading to poor model performance. Businesses frequently overestimate AI's ability to "magically" fix these issues, which is a key reason many projects fail. Additional challenges include scalability, security risks, and integrating with legacy systems, all exacerbated by the need for clean, governed data and robust hardware.

How do regulation and data-privacy rules in the GCC (including localization, KYC/AML, and government procurement) affect investment decisions and go-to-market timelines for AI bot vendors?

Data privacy and localization requirements pose the biggest roadblocks for vendors and startups, demanding substantial investments in compliant infrastructure. Ambiguities in regulations further delay go-to-market timelines, as companies navigate varying rules across GCC countries to avoid penalties. KYC (Know Your Customer) and AML (Anti-Money Laundering) mandates add layers of complexity, especially for AI bots handling financial or sensitive data, requiring enhanced compliance features like suspicious activity detection.

However, government procurement is relatively easier to address, particularly in the UAE, where AI is a core strategy with dedicated budgets and roles like Customer Happiness Officers and AI Officers. The UAE's unique Ministry of AI supports this, focusing on improving resident engagement and information access. Overall, while the GCC's regulatory landscape is business-friendly and encourages AI investment, vendors must prioritize localization and privacy to accelerate adoption and secure funding.

What does the funding landscape look like today for startups building AI agents in the region; are investors prioritizing vertical use-cases, enterprise pilots, or core R&D models (LLM improvements, speech tech, NLU)?

The funding landscape for AI agent startups in the GCC varies by stage. Large funds, including government-owned ones, prioritize core R&D, such as building localized models for LLMs (large language models), speech tech, and NLU (natural language understanding). For example, institutions like MBZUAI exemplify this focus on foundational AI development. Total funding in the GCC AI agents sector has exceeded $33.4 million over the last decade, with the bulk in recent years, reflecting a surge in investments.

Investors are increasingly favoring vertical use-cases and enterprise pilots that address operational challenges or deliver incremental gains, as nearly all enterprises are now running such pilots either in-house or with vendors. Globally, AI agent funding nearly tripled in 2024, with trends toward specialization in sectors like banking and telco, making enterprise-focused startups more attractive for scaling.

From a talent and partnership perspective, is the region better served by local product teams, global engineering hubs, or partnering with international platforms (OpenAI, Google, AWS)? Which approach attracts more funding?

The GCC is best served by partnering with international platforms like OpenAI, Google, or AWS while establishing local engineering hubs. This hybrid approach blends global expertise with cultural insights to solve regional problems, such as Arabic localization and data sovereignty. Local product teams ensure relevance to GCC-specific needs, but global hubs attract top talent and foster innovation.

Partnerships, like AWS's investments in generative AI centers or joint ventures in Saudi Arabia, have proven effective in advancing infrastructure and training. This model attracts the most funding, as investors prioritize solutions addressing regional challenges, with sovereign wealth funds and international collaborations driving billions in AI investments across the Gulf.

For buyers in the GCC, what are the top KPIs and ROI signals that convince procurement teams to move from pilot to paid production for AI agents (containment rate, deflection, lead conversion, cost per contact, compliance metrics)?

Procurement teams in the GCC prioritize clear, value-based outcomes that demonstrate AI agents' potential to boost efficiency or profitability. Key KPIs include:

1. Containment/Self-Service Rate: Measures the percentage of queries resolved without human escalation, ideally aiming for high deflection to reduce agent involvement.

2. Deflection Rate: Tracks how many interactions are handled autonomously, directly impacting cost savings.

3. Lead Conversion Rate: Evaluates effectiveness in sales or engagement scenarios, showing revenue uplift.

4. Cost Per Contact: Compares pre- and post-AI costs, with reductions (e.g., from $1+ to under $0.5) proving ROI.

5. Compliance Metrics: Ensures adherence to regulations like data privacy, with low error rates in KYC/AML processes.

Additional signals like average handling time (AHT), customer satisfaction (CSAT), and escalation rates are tracked to justify scaling from pilots, linking directly to organizational profitability and operational gains