Saudi Arabia identified the transformative power of artificial intelligence (AI) early on, recognising its potential to drive economic diversification, enhance efficiency across sectors and position the Kingdom as a global leader in cutting-edge technology. In 2020 under the directive of King Salman bin Abdulaziz Al Saud, the government introduced a comprehensive national strategy for data and AI, signalling a high-level commitment to harnessing these advanced technologies for national growth.
Strategic Vision
The strategy outlines ambitious targets for AI adoption across government, industry and society, with the aim of making AI a core driver of Vision 2030’s objectives. Since its launch, this agenda has begun to yield tangible results, though the Kingdom’s long-term goals are still evolving. From developing a skilled AI workforce to establishing regulatory frameworks and fostering public-private partnerships, Saudi Arabia is making strides toward becoming a global AI leader while navigating the complexities of integrating data-driven systems into its socio-economic fabric.
That strategy is managed by the Saudi Data and AI Authority (SDAIA), under the Ministry of Communications and Information Technology. It positions AI to enable the national priorities established under Vision 2030 first, then bestow competitive advantage in niche domains and finally foster an industry in which the Kingdom leads on the international stage. The plan is to attract $20bn in investment and train 2000 Saudi data scientists by 2030.
Other important entities in the execution of the strategy include the National Centre for Artificial Intelligence, the National Data Management Office and the National Information Centre. SDAIA functions as the central supervisor for AI and big data integration, positioning Saudi Arabia among a select group of global leaders in data standardisation and technology-driven innovation. Complementing this mission, the SDAIA Academy focuses on cultivating a skilled new generation of data scientists to drive forward the nation’s digital ambitions.
Building Blocks
The building blocks are certainly in place in the form of a cloud computing framework, a comprehensive Personal Data Protection Law, and an anticipated $15bn to be invested in data centres by 2030, raising the installed capacity to 1300 MW as US-based multinationals Amazon, Microsoft and Oracle, along with Chinese giant Huawei, complete major projects. In 2024 Saudi Arabia ranked second among G20 countries in the International Telecoms Union’s ICT Development Index.
Global consultancy firm PwC estimates that AI will galvanise the Middle East economy to the tune of $320bn by 2030, with Saudi Arabia to enjoy the largest absolute gains through contributions, exceeding $135bn, representing 12.4% of its GDP. The UAE is expected to see the largest impact overall, with close to 14% of its 2030 GDP being AI-driven, according to PwC estimates. Across the region, the majority of efficiency gains are expected to occur in labour-intensive sectors like retail and health care.
As it oversees this transition, SDAIA, founded in 2019, is focusing on the five priority areas of education, government, health care, energy and mobility. The AI push permeates every level of government, revolving around a National Information Centre that acts as a national data bank and the primary provider of government-linked AI insights.
Currently, SDAIA operates in the absence of specific AI regulation, though in September 2023 the authority issued draft AI Principles, which though not legally binding in terms of compliance, are fairly comprehensive in scope. In terms of risk, they cover mitigations such as the use of watermarks to counter deepfakes, guidance on training datasets and limiting open access to scientific generative AI models, content labelling in case of AI hallucination and awareness-raising and training initiatives. While SDAIA defines AI as “systems that employ methods that can gather data and use it to predict, suggest or make decisions with varying degrees of autonomy and select the best course of action to accomplish particular objectives,” its focus is increasingly on generative AI as the means of successfully achieving transformative economic impacts.
Generative AI Potential
Within generative AI specifically, ICT is positioned to enjoy the most transformational AI-driven growth. PwC posits telecoms, media and entertainment and technology as the industries with the highest upside margin, noting that generative AI can help to generate personalised customer segmentation, profiles and product portfolios. In telecoms, for example, PwC suggests that generative AI presents potential upside of 12%, equivalent to SR11bn ($2.9bn), and can help firms accelerate cross-selling of services to small and medium-sized enterprises to better capture a SR28bn ($7.5bn) opportunity by 2028. In technology, there is 15% upside, predicated on the Kingdom’s booming tech sector, smart city projects and digital localisation efforts. Generative AI assistants have been shown to lift developer productivity and streamline proposal creation, boosting technology service providers’ margins, for instance. Investment in home-grown media presents another opportunity, with generative AI poised to help creatives companies produce Arabic content for a local audience.
It is also worth noting that Saudi Arabia’s national energy company, Aramco, invested $3.5bn in research and development in 2023, and leads peers in terms of AI investment targeting production, cost optimisation, predicative maintenance and threat detection, including cybersecurity, spills and leaks.
Financing AI Ambitions
If the Kingdom fails to realise its goals, it will not be for a lack of funding. Perhaps the most striking recent technological innovation news was that the government, through the Public Investment Fund (PIF) sovereign wealth fund, planned to launch a $40bn AI investment fund in partnership with US-based venture capital firm, Andreessen Horowitz, and other firms. The PIF has approximately $900bn in assets under management, making such an initiative well within its scope but still by far the largest single such commitment of capital to AI yet seen globally. Data centres and chip technology are thought to be targets for a fund that would be managed in partnership.
Meanwhile, in March 2024 the annual Leap conference in Saudi Arabia witnessed the announcement of a new accelerator fund for local AI start-ups, backed by $1bn funding. GAIA, as the project is known, is a collaboration between SDAIA, the National Technology Development Programme and the US-headquartered global AI community New Native. Based out of Riyadh’s start-up space known as The Garage, GAIA had already recruited nearly 50 AI start-ups as of November 2024.
AI Talent Pool
Data from online professional network, LinkedIn, suggests the AI-savvy talent pool doubled between 2016 and 2023. The ratio of AI talent hiring relative to overall hiring showed growth of 24% year-on-year for that period.
Reinforcement learning, pattern recognition, predictive modelling, supervised learning and knowledge of the PyTorch machine-learning library are the fastest-growing skills. This growth is largely being propelled by imported talent, with Saudi Arabia rising to 15th in the world in 2024 in terms of the net inflow of AI talent relative to population size, up from 24th in 2023. Many of those hires will find their way to The Garage start-up ecosystem in Riyadh, which already hosts a flourishing domestic AI scene comprising more than 100 start-ups, including customer experience management player Lucidya, Arabic enterprise AI specialist Mozn, and industrial safety and security platform UnitX.
Looking ahead, Saudi Arabia inaugurated the Industrial AI Academy in February 2024, in partnership with SDAIA and US-based tech firm NVIDIA. Its objective is to equip a new generation with proficiency in tapping industrial AI to revolutionise intelligent environments and processes, while also promoting partnerships with top technical organisations to pioneer cutting-edge technologies.
Data has proven to be the new oil, as British mathematician Clive Humby predicted in 2006, and Saudi Arabia is clearly on track to leverage AI to capitalise on the transformative potential of both raw materials. Through strategic investment, regulatory frameworks and training initiatives, Saudi Arabia is setting the stage for a diversified economy where data and AI become catalysts for new industries and societal progress. As the Kingdom continues on this path, it is not only maximising the value of these new “raw materials” but also setting a benchmark for other nations in the region aiming to modernise their economies through advanced technologies.
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