Saudi Arabia's AI Revolution: Unleashing Risk Appetite And Financial Power

As the Saudi Public Investment Fund (PIF) marches towards an impressive $1 trillion by 2025, it solidifies its position as a major player in global investments, particularly in transformative tech. PIF, guided by Crown Prince Mohammed Bin Salman (MBS), is the 5th largest Sovereign Wealth Fund in the world, with $926 billion in assets (SWFI). PIF is the main financial vehicle to execute the Crown Prince's Vision 2030, a transformative initiative designed to diversify Saudi Arabia's economy, generate employment, and prosperity for its youthful population (80 percent of which is younger than 35). PIF is investing in sports, AI, tourism, clean energy, smart cities, and floating industrial towns.

Saudi Arabia has prioritized investing in AI as the quickest way for the country to innovate, create jobs, and boost competitiveness. The Saudis are promoting innovation from the ground up, ensuring that AI is fully integrated into the country's development strategies and social context. In other words, Saudi Arabia wants to create a fertile environment where AI can grow, evolve, and thrive. From establishing the Saudi Data and Artificial Intelligence Authority (SDAIA) to launching NEOM and Quiddya smart cities, Saudi Arabia is building an ecosystem that requires AI, computing power, and chip manufacturing mainstreaming.

One of the AI-powered investments, which is also a core Vision 2030 project, is NEOM, the groundbreaking $500 billion zero-emission smart city set to become operational in 2027. NEOM holds the potential to make Saudi Arabia a global hub of technological and sustainability excellence, attracting global talents and billions of investments. To ensure the success of NEOM, a substantial investment in generative AI and training is needed. This is why the Government aims to train over 20,000 data and AI specialists by 2030.

In terms of tech investment, PIF has been pouring huge amounts of cash towards AI projects, both in the venture space as well as more mature ventures. Just to get a sense of the global AI investment trend, according to industry reports, global AI spending is expected to reach $110 billion by 2024, indicating a massive increase from previous years. To contextualize the importance of AI for Saudis, PIF plans to allocate $15 billion towards AI over the next five years. Additionally, Saudi's new $100 billion investment firm, Alat, announced several projects aimed at positioning KSA as a global leader in AI, industrials, design, and manufacturing. Fully controlled by PIF, Alat intends to invest $100 billion by 2030, aligning the Vision 2030 plan to reduce reliance on oil by increasing revenue from technology. This strategic move further underscores Saudi's commitment to shaping its economic future through bold investments in cutting-edge technologies and industries.

PIF plans also to secure partnerships with international tech giants, Venture Capitalists, and local startups, facilitating a dynamic flow of expertise and innovation towards groundbreaking companies and projects. Saudi Arabia's ambitious goal is not just to invest in and promote AI but also to actively shape its trajectory, consolidating its position as a global center for AI innovation. From a regional perspective, according to PWC, AI is expected to generate $320 billion of economic output by 2030 in the Middle East, with Saudi Arabia's contribution projected to be a massive $135.2 billion.

In conclusion, Saudi Arabia is strongly committed to not just embracing AI but integrating it within the very fabric of its economic activities and priorities. With their balance sheet swelling because of the oil and gas bonanza, and the youthful population's appetite for risk-taking, we should expect the shift of technological power to happen in favor of the Saudis and their neighbors.