Last Updated on November 9, 2023 by newseditor
Microsoft and Oracle Corp., which are constructing cloud regions in the country, have invested more than $9 billion in future technologies in Saudi Arabia. Saudi officials have pushed foreign businesses to invest in the country and relocate their regional offices to Riyadh to take advantage of government contracts.
The Kingdom has significant potential for tech investments, including the NEOM project. Saudi Arabia is promoting NEOM, a new commercial and technology region in the northwest region facing the Sinai Peninsula. The initiative intends to compete with the urban innovations of Dubai, Abu Dhabi, and Doha and to transfer the economic focus from the Persian Gulf to the Red Sea by utilising the proximity to Egypt, Jordan, and Israel.
Under the direction of its de facto ruler Crown Prince Mohammed bin Salman, KSA has been financing hundreds of billions of dollars in an economic strategy known as Vision 2030.
One of the cornerstones of Vision 2030, which seeks to diversify the economy away from oil, is foreign direct investment (FDI). Still, it has needed help luring this type of funding. Entrepreneurial empowerment is a crucial component of Vision 2030. This has created a favourable environment for tech investors and entrepreneurs in Saudi Arabia. Emerging industries like wealth management and fintech are expanding quickly throughout the Kingdom.
Major Tech Investments in Saudi Arabia
Investing in venture capital has increased dramatically in Saudi Arabia during the past few years. According to Arab News, nine funds totalling $2.4 billion were unveiled at a recent LEAP 2023 event in Riyadh to support startup growth. Harvard Business Review also noted that in 2021 and 2022, VC funding for Saudi startups surged by 72%, reaching $987 million across 144 agreements.
Some of the most prominent digital giants in the world have already made investments in the Kingdom, including Microsoft, which put $2.1 billion in a global super-scaler cloud, and Oracle, which invested $1.5 billion to open new cloud areas in the Kingdom and grow its MENA business. Zoom and Aramco have teamed to build a cloud area in the Kingdom. At the same time, Huawei has committed $400 million in cloud infrastructure for its services in the Kingdom.
These initiatives are a component of Saudi Arabia’s Vision 2030 strategy, which seeks to reduce the country’s dependency on oil. The strategy aims to portray Saudi Arabia as a technology and innovation leader and draw in foreign direct investment. Abdullah Alswaha, Saudi Minister of Communications and Technology noted that another $4.5 billion was invested in national and international assets across several sectors. For instance, Tonomus, a division of the crown prince’s $500 billion NEOM initiative, announced last year that it would invest $1 billion in AI, including a metaverse platform, by 2022.
Meanwhile, recent predictions suggest that Saudi Arabia is projected to invest $34.6 billion in information and communications technology, putting it in a leadership position for the MENA region’s economic transition to the digital age. Long-standing businesses like Commvault are helping important KSA organisations with their digital transformation efforts throughout the Kingdom.