AI Agent Report (STV)

Summary

• The report foresees around ten GCC-based Gen AI companies worth $1-3 billion each within the next five years, with at least $23b of cost efficiencies.p.2
• Excluding OpenAI, over $1 billion has been invested in solutions built on existing foundational models in the US, with a 64% CAGR, while overall VC investment dropped by 47%.p.6
• Of 255 accepted applications in Y Combinator's Summer 2024 cohort, 76% were directly or indirectly AI Agent startups, versus 18% in Summer 2021.p.7
• AI agent companies worth $18b in aggregate could be created by serving the GCC market only.p.10
• AI agents can enable 10%-30% savings on average of the impacted functions.p.11
• India invested $128m in H1 2024, all focused on application-layer AI companies.p.15

Key insights

1. Training OpenAI's GPT-4 cost $78 million, whereas a generative AI application prototype can be developed with a few thousand dollars.p.4
2. In India, total VC funding declined by 75% while AI investment surged with an 87% CAGR.p.7
3. AI Agents could theoretically augment or replace the service industry, a $16 trillion global market.p.7
4. Klarna's AI assistant produced the work equivalent of 700 full-time agents.p.9
5. AI agents could generate annual savings of $3bn for Tadawul (excluding Saudi Aramco), $12bn for Saudi companies, and $23bn for GCC companies.p.10
6. Banking shows cost savings of $890m, or 27% of the cost base of impacted functions.p.11
7. Saudi Arabia data center capacity per GDP is at 25% the one of North America.p.14
8. Israel saw $93m invested in application-layer AI startups in H1 2024.p.15