President and CEO of Saudi’s Aramco, Amin H. Nasser, speaks throughout 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 perhaps 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 development avenues.
Based on Saudi Arabia’s Minister for Funding Khalid Al Falih, greater than half — 50.6% — of the Saudi financial system is now “utterly decoupled” from oil.
“This share is rising,” Al Failh instructed CNBC’s Dan Murphy, including that authorities income was once nearly utterly 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 happy. We need to do extra. We need to speed up the dominion’s diversification and development story,” he mentioned.
Saudi Arabia is doubling down on fast-growing sectors akin to synthetic intelligence, naming it one in all its new development areas, with Al Failh saying the dominion will likely be a “key investor” in creating AI purposes and huge language fashions. Saudi Arabia would additionally construct knowledge facilities “at a scale and at a aggressive price not achieved anyplace else.”
“AI has emerged [in] the final three, 4 years, and it is undoubtedly 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, instructed CNBC that for AI infrastructure because of its vitality surplus. The nation might see greater than $135 billion in positive factors by 2030 because of AI, in accordance with PwC.
Saudi Arabia’s quarterly finances efficiency report revealed that whole 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% improve in non-oil segments. Oil exercise, however, 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 had 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% up to now this 12 months, in accordance 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 handle 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 practically $1 trillion in capital deployed throughout sectors of strategic curiosity.
Tourism has additionally been a key development space for Saudi Arabia. Ahmed Al-Khateeb, the nation’s tourism minister, instructed 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 can 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.
