Saudi capital market strategy set to boost growth, transparency

The Capital Market Authority aims to double the number of fintech companies licensed by 2026, with a focus on open finance applications and regulatory support for startups. File
The Capital Market Authority aims to double the number of fintech companies licensed by 2026, with a focus on open finance applications and regulatory support for startups. File
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Updated 13 January 2025
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Saudi capital market strategy set to boost growth, transparency

Saudi capital market strategy set to boost growth, transparency
  • Capital Market Authority initiatives to transform capital market into a key pillar of the national economy

RIYADH: Saudi Arabia’s Capital Market Authority has unveiled its ambitious 2024-2026 strategic plan, which aims to further develop the Kingdom’s financial market and enhance its global competitiveness.

With more than 40 initiatives, the plan is set to transform the capital market into a key pillar of the national economy, in line with Vision 2030.

In an interview with Arab News, Constantin Cotzias, European director at Bloomberg LP, said that the plan’s alignment with Vision 2030 is crucial to drive Saudi Arabia’s economic diversification through robust financial integration and growth. 

“The strategy emphasizes capital market development as a key enabler of economic growth by expanding financing options, promoting investment opportunities, and attracting international capital,” said Cotzias. 

He added that the sukuk and debt markets will play a key role in financing large-scale infrastructure and sustainable investments, driving the Kingdom’s non-oil economy.

Strategic pillars

The CMA’s strategy is built around three main pillars: market growth, ecosystem enablement, and investor protection.

The first pillar focuses on enhancing the capital market’s position in financing and investment. This includes expanding the stock market’s role in capital raising, developing sukuk and debt instruments, and enabling the asset management industry to attract more international investment. 

“Competitive valuations and robust market liquidity are essential for attracting investors, making Saudi debt instruments more appealing than global alternatives,” Cotzias added. 

The strategy emphasizes capital market development as a key enabler of economic growth by expanding financing options, promoting investment opportunities, and attracting international capital.

Constantin Cotzias, European director at Bloomberg LP

A key component of this pillar is the CMA’s focus on increasing the size of the debt instruments market to 24.1 percent of gross domestic product by 2025. Cotzias explained that achieving this target will require regulatory reforms that enhance market accessibility for global investors and improve liquidity. 

Martin Rauchenwald, managing partner at Arthur D. Little, told Arab News that deepening the market and increasing foreign investor participation is essential for creating a more liquid and resilient market that can withstand global economic volatility. 

Furthermore, simplifying the regulatory framework for issuing and listing debt instruments will significantly speed up capital market activities. 

Rauchenwald compared this to international benchmarks, noting that markets like the US and EU have streamlined their processes to allow for higher volumes of bond activity, which is a goal Saudi Arabia is striving for.

The second pillar emphasizes enabling the capital market ecosystem, particularly through support for financial market institutions and fintech innovation. 

The CMA aims to double the number of fintech companies licensed by 2026, with a focus on open finance applications and regulatory support for startups. 

Mohammad Nikkar, principal at Arthur D. Little Middle East, highlighted the importance of the CMA’s Fintech Lab initiative, which provides a controlled environment for fintech companies to experiment and grow. 

“The CMA’s sandbox approach balances regulatory oversight with the flexibility needed to foster fintech startups and innovation,” Nikkar told Arab News. 

Deepening the market and increasing foreign investor participation is essential for creating a more liquid and resilient market that can withstand global economic volatility.

Martin Rauchenwald, managing partner at Arthur D. Little

The growth of fintech is expected to enhance competition and operational efficiency in the financial market. By promoting innovation and integrating advanced technologies, the CMA aims to streamline financial operations and improve access to services for both institutional and retail investors.

The third pillar focuses on protecting investors’ rights by improving transparency and supervisory mechanisms. 

Cotzias pointed out that enhancing compensation mechanisms and dispute resolution processes are vital for building investor confidence, particularly among retail investors. 

Drawing comparisons with the UK’s Financial Services Compensation Scheme, Cotzias noted that these measures reassure both local and international investors, ensuring that the market operates under a robust regulatory system.

Key initiatives

Among the 40 initiatives under the CMA’s strategy, the introduction of Special Purpose Acquisition Companies in the parallel market and the issuance of Saudi Depositary Receipts stand out. 

These steps are expected to diversify investment opportunities and attract both domestic and international investors. Rauchenwald emphasized the importance of SDRs in boosting cross-border investment, adding that this move is aligned with the CMA’s goal of integrating Saudi markets globally.

In addition to facilitating debt market growth, the CMA is committed to developing regulatory frameworks for green, social, and sustainable debt instruments. 

Cotzias emphasized that the lack of international standardization for sustainable finance products presents a challenge but added that the CMA’s efforts to align with global practices will attract more investment into green finance. 

“Saudi Arabia can draw inspiration from frameworks like the EU’s Green Bond Standard, which reduces greenwashing risks and improves comparability,” he said.

The CMA’s green sukuk initiative is a significant milestone for the Kingdom’s environmental, social, and governance goals. Nikkar pointed out that Saudi Arabia’s competitive edge lies in its ability to combine Islamic finance with global sustainability goals. 

“Green sukuk aligns with international best practices while leveraging Saudi Arabia’s leadership in Islamic finance,” he explained.

The CMA’s goal is to increase the stock market’s value to 80.8 percent of gross domestic product by 2025, up from 66.5 percent in 2019. This will be achieved by expanding investment opportunities, including sustainable and green sukuk, and by simplifying regulatory procedures to encourage more companies to list on the market.

Focus on fintech and innovation

The CMA’s strategy places significant emphasis on supporting financial technology innovation. 

As Nikkar noted, the regulatory flexibility provided by the Fintech Lab allows startups to experiment with new business models in a controlled environment without being subject to the full regulatory burden typically imposed on licensed capital market participants. 

This fosters a dynamic fintech sector while ensuring consumer protection.

By encouraging fintech growth, the CMA is enhancing the overall efficiency and competitiveness of the financial market. This initiative will not only benefit startups but also push traditional financial institutions to innovate and offer better services to meet the evolving needs of investors.

Rauchenwald added that the CMA’s focus on fintech innovation, combined with its risk-based supervision model, will reshape the competitive landscape for banks, brokers, and asset managers in Saudi Arabia. 

“Fintech growth will disrupt traditional players, prompting them to innovate and compete more aggressively,” he said.

Achievements and future targets

The CMA’s 2024-2026 plan builds on the successes of its previous 2021-2023 strategy, which saw a 52 percent increase in the number of listed companies — rising from 204 in 2019 to over 310 by the end of 2023. 

The value of managed assets also grew by 74 percent during this period, reaching SR871 billion ($231.9 billion).

Rauchenwald highlighted the significance of the new procedures for class action compensation, which allow groups of investors to file lawsuits collectively and seek compensation for misconduct. 

“This is a major step forward in promoting investor confidence and holding companies accountable,” he said, comparing it to global standards seen in the US and Europe.

Looking ahead, the CMA aims to continue growing the asset management industry by introducing more flexible regulatory frameworks for investment funds. 

Cotzias noted that easing regulatory barriers for foreign investors will be critical in boosting Saudi Arabia’s competitiveness, especially in sectors such as real estate, renewable energy, and technology.

International competitiveness

One of the key goals of the CMA’s 2024-2026 strategy is to enhance the Saudi financial market’s international appeal. 

By implementing regulatory reforms, improving transparency, and promoting ESG-aligned financial products, the CMA aims to position Saudi Arabia as a leading regional and global financial hub.

Nikkar emphasized that diversifying financial products, particularly in Islamic finance, will help Saudi Arabia stand out against regional competitors like Dubai and Qatar. 

“The Kingdom’s leadership in Islamic finance, combined with its commitment to sustainability, gives it a competitive edge in attracting both regional and international investors,” he said.

In terms of attracting foreign investors, Cotzias pointed out that the CMA’s review of foreign investor restrictions, including simplified registration and increased ownership limits, will enhance Saudi capital markets’ appeal to global investors.

Investor protection and governance

Central to the CMA’s strategy is the protection of investors’ rights. The authority plans to strengthen corporate governance practices across listed companies and investment funds. 

According to Cotzias, these governance reforms are expected to raise the accountability of board members, improving investor trust in Saudi financial institutions.

The CMA’s focus on improving transparency and supervisory mechanisms will also enhance investor protection. By simplifying procedures for compensation and complaints resolution, the CMA aims to create a more transparent and accountable market environment.


Saudi Arabia transforming into ‘center of gravity’ in regional tech space: expert 

Saudi Arabia transforming into ‘center of gravity’ in regional tech space: expert 
Updated 09 February 2025
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Saudi Arabia transforming into ‘center of gravity’ in regional tech space: expert 

Saudi Arabia transforming into ‘center of gravity’ in regional tech space: expert 

RIYADH: Saudi Arabia is quickly becoming a dominant force in the regional technology ecosystem, establishing itself as the “center of gravity” for startups in the Middle East, according to an industry expert. 

In an interview with Arab News during the LEAP 2025 Tech Conference, Mohammed Al-Zubi, founder of Saudi early-stage venture capital firm Nama Ventures, stated that the rapid evolution of the event is a reflection of the momentum in the sector. 

“The amount of progress we’ve made from LEAP 23, 24, 25 — it’s phenomenal,” he said, adding that the impact of the event is mind-boggling. 

“Minister Al-Swaha was on stage — the level and magnitude of the announcements are really mind-boggling,” he added. 

He emphasized that the Kingdom is now a regional leader in investment, deal flow, and overall market growth. “If you look at all the reports, Saudi Arabia today is leading on all metrics.” 

Prioritizing teams over ideas 

As an early-stage firm, Nama Ventures focuses on investing in strong founding teams with complementary skill sets and clearly defined roles. 

Al-Zubi described the company’s investment approach as having two key components: a micro-level evaluation of the team and a macro-level assessment of the idea. “As they say in real estate—location, location, location—here, it’s team, team, team,” he explained. 

He stressed that Nama Ventures typically avoids investing in solo founders unless they have an exceptionally strong track record. 

“We typically don’t invest in solo founders unless the pedigree speaks for itself,” Al-Zubi said. Instead, the firm looks for teams with clear role clarity and complementary skill sets, ensuring a balance between execution, operations, and sales. 

“So it can’t be, you know, two sellers coming together. We want to see the seller, the doer, and the operator,” he explained. 

While Nama Ventures is willing to take risks related to execution, it steers clear of risks associated with unproven business prototypes. The firm prefers to invest in established business models rather than entirely new concepts.

“We don’t mind what we refer to as copycats,” he said. “We think about taking a model that works very well, innovating, and localizing it for this part of the world makes sense.” 

The firm is particularly interested in startups that can adapt existing successful business models to the MENA region while minimizing risks. 

AI across all industries 

While Nama Ventures remains broadly sector-agnostic, it is naturally inclined toward industries with strong transactional components. 

“Although we say we are sector agnostic, in reality, we don’t add much value if it’s a gaming or content company,” Al-Zubi noted. 

“We like and favor transactional stuff. Show me a product or service in exchange for a riyal.”

This focus has led the firm to invest more heavily in fintech, proptech, and other sectors with clear revenue streams. 

Artificial intelligence is another critical element in the firm’s investment thesis, not as a standalone category but as an embedded technology across various industries. 

“Today, we don’t think of AI as a separate model. We want to see AI embedded in fintech. We want to see AI embedded in proptech. We see AI embedded in entertaintech,” he said. 

Al-Zubi emphasized that startups that fail to integrate AI into their operations risk falling behind. “If you have not taken advantage of AI today, you are a generation behind, and you’re in the playground with a broken leg,” he added.

Nama Ventures has incorporated AI tools to enhance its investment process. 

The investment approach 

Al-Zubi highlighted that Nama Ventures differentiates itself by taking a highly involved approach to supporting its portfolio companies. 

The firm does not act as a passive investor but instead plays an active role in guiding founders, leveraging its entrepreneurial experience. 

“The beauty about this asset class is there is no such thing as an investor— you have to be a value-add investor by definition. We’re not silent financial investors. Part of our role is to provide value-add,” he said. 

He pointed to Nama’s experience as a key differentiator. “We’ve walked the talk. We say we are technologists that became technology managers, that became entrepreneurs, that failed and succeeded, that became angel investors, and then fund managers,” he explained. 

“I always joke and say, if you have not had a moment where you look into the ceiling worrying about payroll as a founder, you should not be writing checks for early-stage founders because you lack that entrepreneurial empathy.” 

Nama Ventures also helps its portfolio companies navigate the complexities of fundraising. “We do a lot of heavy lifting on structuring the rounds in itself,” Al-Zubi said. 

“A lot of the time, although we’re on the buy side—we’re investing—we’re really helping them out, almost like a sell-side advisory, in terms of helping them think about the deal and the terms.” 

He emphasized the importance of ensuring that founders understand the agreements they are entering. “We love that our founders are educated and sophisticated because it makes for a better long-term relationship.” 

The firm’s technical expertise also sets it apart from other investors. “We’re geeks. We’ve been on the console, we’ve written code,” Al-Zubi said. 

“If you want to be a tech investor and don’t have a tech affinity, I think that’s a disadvantage.” This hands-on technical knowledge enables Nama Ventures to assist startups in building their tech teams and optimizing their technical infrastructure. 

“We’re known as the fund that can help you find your CTO (chief technology officer) or connect you and help you with your tech stack.” 

An unconventional LP base 

Unlike many venture capital firms that raise funds from institutional investors or sovereign wealth funds, Nama Ventures opted to build its first fund primarily through high-net-worth individuals and family offices. 

“We opted for Fund I, which is not typical. We didn’t raise from sovereigns, we didn’t raise from institutions,” Al-Zubi said. “We went the high-net-worth family office route, and we enjoy a very healthy LP (limited partners) base.” 

Nama’s investors see the firm as a vehicle for accessing early-stage opportunities while managing risk. 

“We’ve got 63 LPs that have partnered with us, and we’ve become their feeder fund,” Al-Zubi explained.

Many of these family offices understand that early-stage investing can be highly risky and challenging to diversify on their own.

“A lot of the family offices come and say, I really should not be doing early-stage pre-seed and seeds. It’s too risky, I’m going to lose money, I cannot diversify—let Nama be my diversification engine. Let them uplift that deal flow, and I’ll cherry-pick their winners and co-invest with them.” 

This approach has allowed investors to invest in leading technology companies at such an early stage. 

Al-Zubi referenced startups like Tamara, Salla, and Calo, which are all Nama portfolio companies on the path to initial public offerings, with some currently crossing $1 billion in valuations. 

KSA’s support for startups 

Al-Zubi believes Saudi Arabia’s support for the startup ecosystem is unmatched globally. Having spent time in the Silicon Valley, London, and the Middle East, he argued that the Kingdom’s government-led initiatives are unparalleled. 

“I would argue that Saudi Arabia today has an unparalleled support and incentive plan for the tech startup ecosystem,” he said. “The coopetition between the government entities, whether it’s NTDP (National Technology Development Program), whether it’s MISA (Ministry of Investment of Saudi Arabia), whether it’s MISK—it’s incredible. It really is incredible.” 

He sees the Kingdom’s multi-layered approach to economic development—attracting global tech giants while nurturing early-stage startups—as a key driver of long-term growth. 

Just act 

Al-Zubi encourages aspiring entrepreneurs to take the leap and start their own businesses, highlighting that the experience of building a startup is an invaluable learning opportunity.

“My advice is just do it. You don’t have to have all the answers—you have to figure it out along the journey,” he said. 

“Even if you do an entrepreneurial endeavor and fail, you are so much more interesting for the next job. You’re probably going to get your boss’ boss’ job because you’ve spent a year, 18 months being a domain expert in that field.” 

He urged founders to embrace iteration and adaptability. “We have a saying: if you’re still on the same business model 18 months from launching, something is actually wrong. You cannot be that right,” he said. “Keep pivoting and iterating till you get more product-market fit before you run out of cash.” 


Saudi Aramco executive highlights key factors to unlock AI potential

Saudi Aramco executive highlights key factors to unlock AI potential
Updated 09 February 2025
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Saudi Aramco executive highlights key factors to unlock AI potential

Saudi Aramco executive highlights key factors to unlock AI potential

RIYADH: Real-world data, computing power, and talent are the three key factors required to unlock the full potential of artificial intelligence, according to a Saudi Aramco top official.

On the first day of LEAP in Riyadh from Feb. 9-12, the executive vice president of technology and innovation at Saudi Aramco Ahmad Al-Khowaiter, discussed in his speech “Transforming Industries with Data and AI” these main requirements crucial to Aramco’s success.

This falls in line with the National Strategy for Data and Artificial Intelligence, which aims to train 40 percent of the workforce in essential skills to combat data and AI illiteracy and develop a talent pool of 20,000 data and AI specialists.

It also aligns well with the strategy’s target of attracting SR75 billion ($19.99 billion) in local and foreign investments, as well as supporting over 300 startups to encourage entrepreneurship. 

“Maximizing its (artificial intelligence) potential requires three main elements, three main enablers. One is tremendous amounts of real-world data. You need the data first, then you need to be able to put in place computing power, computing infrastructure to be able to do the models,” Al-Khowaiter said. 

“Finally, and probably the most important element, which I think we tend to forget in our excitement around technology, is you need the talent. You need the subject matter experts who can tell you if the model is telling the truth,” he added. 

The executive highlighted that Aramco has over 90 years of proprietary data from its extensive geological and process surveys. He explained that the company collects about 10 billion data points daily across all its facilities. 

Al-Khowaiter also shed light on how building capable AI models are not limited to global tech companies. 

He said: “It is within the reach of enterprises, even startups, to design AI suited to their own businesses. We have believed this from the beginning, developing our own models with our own data, which is why it gives me great pleasure to introduce our latest innovation Plant Meta Brain, a time series transformer model utilizing large time series data sets.”

He added: “Using these large data sets, we’re able to model the real-time processes that underlie our operations, and we are able to provide actionable insight in real-time to operators, engineers, and scientists. By working in real time with minimal user input, we anticipate demand, optimize operations, predict product qualities, and maximize production.” 

Al-Khowaiter explained that this approach would allow the company’s experts to focus on more value-added tasks instead of troubleshooting or developing models from the ground up.

“We believe our AI is only as good as our HI, our human intelligence, and this is why we are training. More than 6,000 AI developers across the company,” he said. 

“We’re also using the engineers, scientists and operators we already have to work with those AI developers to train new models, making them more robust and more reliable,” he added.

Al-Khowaiter concluded by saying: “Aramco is not only using our unique size and scale to maximize the use of AI on an industrial scale but our decade’s worth of data.” 

Held under the theme “Into New Worlds,” LEAP 2025 aims to expand business networking and investment opportunities in the tech sector. 

The event plays a critical role in Saudi Arabia’s ambition to become a global technology hub, aligning with its Vision 2030 plan to diversify the economy. As part of this initiative, the Kingdom has pledged $100 billion toward advancing its technology sector.


Saudi Arabia announces $14.9bn investment deals in LEAP 2025

Saudi Arabia announces $14.9bn investment deals in LEAP 2025
Updated 09 February 2025
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Saudi Arabia announces $14.9bn investment deals in LEAP 2025

Saudi Arabia announces $14.9bn investment deals in LEAP 2025
  • Event attracted strategic investments in infrastructure and AI, along with startup funding rounds valued at over $10.9 billion
  • Kingdom is trying to avoid division and polarization as innovation takes center stage globally

RIYADH: Saudi Arabia has announced investments worth $14.9 billion in the technological sector on the first day of the LEAP 2025 Tech Conference as the Kingdom continues to spearhead its economic diversification efforts. 

During the event’s opening ceremony, the Kingdom’s Minister of Communications and Information Technology Abdullah Al-Swaha said Saudi Arabia is witnessing significant growth in the industry, with the number of jobs jumping from 150,000 in 2021 to 381,000 in 2024. 

LEAP 2025 is a flagship event in the Kingdom, as the nation eyes to become a global and regional tech hub, aligned with the goals outlined in the Vision 2030 program. 

“Under the leadership of His Royal Highness (Crown Prince Mohammed bin Salman), and in partnership with you, our global innovators and thinkers of the world — yet again, you keep making history in this dividing moment and announcing $14.9 billion worth of investments and announcements in this LEAP alone,” said Al-Swaha. 

“The numbers speak for themselves. As a digital economy collectively, we (MENA region) have grown by 73 percent to $260 billion in the region from 2021 to 2024. The Kingdom represents 50 percent of it. As a tech force, as His Royal Highness said this region is the new Europe,” he added.
“In terms of growth, we jumped from 150,000 tech force to 381,000 in Saudi, and as a result, the region grows,” Al-Swaha said.

Highlighting Saudi Arabia’s progress in the technological sector, the minister said his country currently has seven unicorns, while the region has 15. 

“If you look at the Kingdom alone, if you put it in the EU zone, we will be the fifth largest tech hub in Europe. If you use unicorns and startups as a proxy for growth, the region grew to 15 unicorns, and the Kingdom grew from two unicorns to seven,” said Al-Swaha. 

Major investment deals

During the event, Groq, a US-based artificial intelligence firm, announced investing $1.5 billion in its project developed in association with Saudi Aramco to launch the world’s largest AI inferencing data center in the Kingdom, following a memorandum of understanding signed in September. 

The inferencing data center is expected to play a crucial role in Aramco Digital’s vision to leverage advanced technologies that drive operational excellence and support Vision 2030. 

The event witnessed Alat, owned by Saudi Arabia’s Public Investment Fund, and Chinese tech giant Lenovo joining hands to establish an advanced manufacturing and technology center based on AI and robotics. 

Lenovo also announced the decision to establish its regional headquarters in the Kingdom. 

China-based retail and e-commerce company Alibaba said it will launch an AI empowerment program in cooperation with Tuwaiq Academy — the training arm of the Saudi Federation for Cybersecurity. 

US-based Databricks also pledged to invest $300 billion over the next three years to upskill Saudi citizens, build the company’s business in the Kingdom, and contribute to the local digital economy. 

SambaNova, another US software firm, agreed to invest $140 million to build advanced AI infrastructure in Saudi Arabia.

Gulf Data Hub, in cooperation with London-based investment firm KKR, announced it will develop data centers with a capacity of 300 megawatts to strengthen the Kingdom’s leadership as a global destination for AI. 

American cloud-based software company Salesforce said it will invest $500 million in the region and establish its regional headquarters in the Kingdom. 

Chinese cloud computing service Tencent Cloud has committed to investing $150 million in local infrastructure, resources, and partnerships within the technology sector over the coming years to support Vision 2030.

The President of Google for the Europe, Middle East, and Africa region, Tara Brady, said the tech giant will contribute $70 billion to the Kingdom’s economy over the next 10 years. 

“Google is committed to the region and the Kingdom. We believe this is the future. Google is doubling down, we believe, over the next 10 years, we could be contributing $70 billion to the economy,” said Brady. 

He added: “We are going to be skilling Saudi nationals, over the next 10 years, one million. We will also scale up the Kingdom to become the number one AI provider for the world.” 

Google Cloud announced investments in digital infrastructure for AI by launching a global hub in Saudi Arabia to serve regional and global demand. 

LEAP 2025 also attracted strategic investments in infrastructure and AI, along with startup funding rounds valued at over $10.9 billion. 

Steering ahead in the intelligent age

Al-Swaha said Saudi Arabia is trying to avoid division and polarization as innovation takes center stage globally. 

“In the analog and digital world, we were talking about the Global North and the Global South. For every dollar made in the Global South, somebody makes three times to five times in the Global North, and that is not acceptable. 

“For the intelligent age, this will even go bigger, where it is projected that only a billion to two will join this exclusive club called the intelligent age, and 6.5 billion by 2030 will be left behind,” said Al-Swaha. 

He added: “I would argue that leaving anyone behind in the intelligent age is as devastating as depriving an individual from getting access to oxygen, water and food.” 

The Saudi minister said the Kingdom is trying to ensure inclusivity in the technological sector, therefore ensuring prosperity for all in the future. 

The minister also said the digital economy is currently valued at $16 trillion. However, 2.6 billion people remain excluded, including 100 million in the Global North and 2.5 billion in the Global South.

“Crown Prince Mohammed bin Salman has bet on closing down the divide of the digital age by fueling cloud, entrepreneurship, tech, for the region and the world, and this is why we are laser-focused on continuing to be the biggest success story in closing down the skills divide, digital divide, and governance divide in partnership with you,” he said. 

Al-Swaha underscored the growth of the reduction of the gender gap in the technological sector and added that women’s empowerment in Saudi Arabia’s tech industry has already surpassed the EU, G20, and Silicon Valley. 

Highlighting the necessity to avoid polarization, the minister said: “We have to celebrate the chat GPT moment of 2022, but we also have to appreciate the DeepSeek moment. The world does not need polarization in the intelligent age. We need to work collectively to celebrate these advancements, where DeepSeek so far is beating all AI models.”


Tencent Cloud to launch Saudi operations in 2025 with $150m investment, says official

Tencent Cloud to launch Saudi operations in 2025 with $150m investment, says official
Updated 09 February 2025
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Tencent Cloud to launch Saudi operations in 2025 with $150m investment, says official

Tencent Cloud to launch Saudi operations in 2025 with $150m investment, says official

RIYADH: Tencent Cloud will begin operations in Saudi Arabia this year with an initial investment of $150 million, as the Chinese tech giant moves to expand its footprint in the Middle East, a company official said. 

Dan Hu, vice president of Tencent Cloud International for the Middle East and North Africa, said the company’s expansion aligns with Saudi Arabia’s broader push to attract foreign investment and establish itself as a global technology hub under Vision 2030. 

“Tencent Cloud’s Saudi region will become operational by 2025. We will see it this year,” Hu said in an interview with Arab News at the LEAP conference in Riyadh. “We are going to invest $150 million for the local infrastructure, we source partnerships over the next few years. We have to support the country’s Vision 2030.” 

The company is working to build its presence in the Kingdom by assembling a local team, forging partnerships, and expanding its customer base. 

“In China, Tencent was established more than two decades ago. We are probably one of the most reputable companies in China. We have WeChat, we have games ecosystem,” he said. 

While Tencent has an established and mature ecosystem in China, Hu acknowledged the company is still in the early stages of expansion in the Middle East. 

“Our data center will be operational by the end of this year. We are still trying to build up our local teams and to build up our local ecosystem, our suppliers and our customers, our system integrators, and our ecosystem partners,” he said. 

Despite its nascent presence in the Kingdom, Tencent has already secured major clients, including clean-energy leader BYD, even before its Saudi operations officially launch. 

Hu sees strong growth potential for cloud computing in the region, particularly in applications leveraging artificial intelligence and generative AI. 

“I think cloud computing can be a very robust infrastructure for AI applications. Cloud computing can be the underlying infrastructure to support the prosperity of AI applications in the Kingdom and also in the region,” he said. 

Hu added that Tencent Cloud has tailored offerings for customers in Saudi Arabia, including gaming solutions, live streaming, and real-time applications. 


IBM expands AI workforce in Saudi Arabia, aligning with Vision 2030: CEO 

IBM expands AI workforce in Saudi Arabia, aligning with Vision 2030: CEO 
Updated 09 February 2025
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IBM expands AI workforce in Saudi Arabia, aligning with Vision 2030: CEO 

IBM expands AI workforce in Saudi Arabia, aligning with Vision 2030: CEO 

RIYADH: US-based tech giant IBM employs a majority of Saudi nationals at its artificial intelligence lab in the Kingdom, underscoring the nation’s commitment to developing local talent. 

It was disclosed during a panel titled “Bringing Tech to Life” on the opening day of LEAP 2025, Riyadh’s flagship technology event, held from Feb. 9-12 under the theme “Into New Worlds.” 

Speaking at the discussion, IBM Chairman and CEO Arvind Krishna said: “Over 70 percent of our hires in (IBM’s AI and R&D lab) are Saudi nationals, not expats.”    

Launched at LEAP 2024, IBM’s $200 million Software Lab in Riyadh supports Vision 2030 by driving digital innovation, job creation, and global tech solutions, aligning with the Kingdom’s pledge to invest $100 billion in its technology sector. 

Saudi Minister of Communications and Information Technology Abdullah Al-Swaha, addressing industry leaders and aspiring innovators, stressed the importance of understanding market shifts.  

“I think no leader in the industry can really help educate all of us — leaders in the room, the youth, the women, the talent — about picking up market transitions and where the market is heading,” he said. 

Krishna acknowledged the growing excitement around AI but noted that for numerical purposes the technology has been in use for two decades. 

He also predicted a seismic shift in computing capabilities, with quantum computing expected to achieve a major breakthrough within the next two to three years.

“In three to five years, we will see something amazing on quantum computers,” he added.  

A key transformation Krishna highlighted was in AI training costs, forecasting a dramatic reduction. “I believe the cost of training will become 1 percent — one over 100 of what it used to be. DeepSeek was a proof point of that,” he noted. 

DeepSeek, a Chinese AI firm, gained rapid attention with its R1 large language model, released on Jan. 20 at a fraction of typical development costs.

Offered under an open-source license, DeepSeek-R1 quickly soared in popularity, with its AI assistant app topping Apple’s App Store and surpassing OpenAI’s ChatGPT. Its success triggered a stock market shakeup as investors reevaluated major US AI companies.  

While large general-purpose AI models currently dominate the field, Krishna emphasized the potential of domain-specific models, which today account for just 1 percent of usage.

“All the fascination is with these large models that serve everybody, but we believe in the next three to four years, domain-specific models will make up over half of all deployed models,” he said. 

LEAP 2025 aims to expand business networking and investment opportunities in the tech sector. The event plays a crucial role in Saudi Arabia’s goal of becoming a global technology hub, in line with Vision 2030’s economic diversification strategy.