President and CEO of Saudi’s Aramco, Amin H. Nasser, speaks in the course of the Future Funding Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024.
Hamad I Mohammed | Reuters
Consider Saudi Arabia and the very first thing that involves thoughts is likely to be its huge, oil-derived wealth.
Whereas oil continues to drive Saudi Arabia’s financial system, the dominion is now increasing into areas akin to synthetic intelligence, tourism and sports activities to diversify its progress avenues.
In keeping with Saudi Arabia’s Minister for Funding Khalid Al Falih, greater than half — 50.6% — of the Saudi financial system is now “fully decoupled” from oil.
“This share is rising,” Al Failh informed CNBC’s Dan Murphy, including that authorities income was virtually fully derived from oil cash, however now, 40% of its income comes from sectors and sources that “don’t have anything to do with oil.”
“We’re seeing nice outcomes, however we’re not glad. We need to do extra. We need to speed up the dominion’s diversification and progress story,” he mentioned.
Saudi Arabia is doubling down on fast-growing sectors akin to synthetic intelligence, naming it considered one of its new progress areas, with Al Failh saying the dominion might be a “key investor” in creating AI functions and enormous language fashions. Saudi Arabia would additionally construct knowledge facilities “at a scale and at a aggressive value not achieved anyplace else.”
“AI has emerged [in] the final three, 4 years, and it is positively going to outline how the longer term financial system of each nation. Those that make investments will lead, and people who lag behind, sadly, will lose,” he identified.
On Monday, AI chip firm Groq’s CEO, Jonathan Ross, informed CNBC that for AI infrastructure because of its vitality surplus. The nation might see greater than $135 billion in beneficial properties by 2030 because of AI, in keeping with PwC.
Saudi Arabia’s quarterly price range efficiency report revealed that complete authorities income for the primary half of 2025 got here in at 565.21 billion Saudi riyals ($150.73 billion), with oil making up 53.4% of the nation’s general income, down from 67.97% in the identical interval in 2019.
In 2024, the nation reported a 1.3% rise in full-year GDP, primarily pushed by a 4.3% enhance in non-oil segments. Oil exercise, alternatively, fell 4.5% 12 months on 12 months.
The nation’s sovereign wealth fund — the Public Funding Fund — has acquired stakes in tech giants, online game publishers and soccer golf equipment because it makes use of oil revenues to diversify into different sectors.
PIF has acquired stakes in video-game heavyweight Digital Arts, establishing the SoftBank Imaginative and prescient Fund with Masayoshi Son’s SoftBank Group Corp in 2017, and a takeover of English Premier League membership Newcastle United in 2021.
When requested if declining oil costs have been piling strain on Saudi Arabia’s financial system and authorities income, Al Falih mentioned that the nation was not scaling again budgets and there have been no cuts to public spending.
Oil costs have fallen in 2025, with Brent crude spot costs down 13.4% to this point this 12 months, in keeping with FactSet. Saudi Arabia’s oil income slid 24% within the first half of 2025 from a 12 months earlier.
The federal government will proceed to deal with all actions that require authorities spending, Al Falih mentioned, noting that the PIF has grown sixfold since its creation and that the nation was approaching almost $1 trillion in capital deployed throughout sectors of strategic curiosity.
Tourism has additionally been a key progress space for Saudi Arabia. Ahmed Al-Khateeb, the nation’s tourism minister, informed CNBC that the sector’s share in GDP had grown to five% in 2024 from 3% in 2019.
“We’re [opening] resorts, new airways, new airports, and the numbers are rising, and we’re specializing in international locations and guests which might be coming from exterior to expertise our nice tradition,” Al-Khateeb highlighted.
The tourism minister additionally expressed confidence that the sector might contribute 10% of GDP by 2030, aiming to boost it to twenty% ultimately.
“This 20% will assist Saudi Arabia to diversify the financial system and make it extra sustainable,” he added.
