https://arab.news/892vu
RIYADH: The discussion around Saudi Arabia’s digital economy is no longer centered on plans and initiatives, but on the economic impact now reflected in the numbers.
Saudi Arabia’s digital economy expanded to SR522 billion ($139.2 billion) last year, up from SR297 billion in 2017, according to Al-Eqtisadiah's Financial Analysis Unit, citing a report by Ocean X.
The digital economy grew by 75 percent over the eight-year period, accounting for approximately 16 percent of the Kingdom’s gross domestic product.
The sharp increase reflects not only the sector’s expansion but also Saudi Arabia’s transition from building digital enablers to generating tangible economic value.
Global race driven by digital infrastructure
The transformation comes as the world experiences an unprecedented race to invest in technology and artificial intelligence.
The global technology services market is projected to grow from $1.61 trillion this year to $1.87 trillion by 2029, driven by demand for cloud computing, artificial intelligence, and cybersecurity. Global spending on AI infrastructure is also expected to surge from $394 billion in 2025 to $902 billion by 2029.
Meanwhile, the global AI market is forecast to expand from $548.79 billion to more than $1.08 trillion by 2030 while generative AI continues to post the fastest growth rates, with its market expected to increase from $311.66 billion to $663.29 billion over the same period.
Against this backdrop, countries are investing heavily in digital infrastructure to attract capital and technology investment, a strategy Saudi Arabia is pursuing at an accelerated pace.
Data centers: Investing ahead of demand
Data centers have become one of the most important indicators of global competitiveness, with Saudi Arabia aiming to increase AI-dedicated data center capacity from 467 megawatts by the end of 2026 to 3 gigawatts by 2030.
The expansion will be supported by more than 80 sq. km of land allocated for data centers, in addition to 63 data centers already operating across the Kingdom.
These developments helped Saudi Arabia rank second globally in data center attractiveness in 2026, while also placing first in the Digital Readiness Index issued by the International Telecommunication Union, or ITU.
For the second consecutive year, the Kingdom also topped the ICT Development Index.
When infrastructure attracts investment
Investment in digital infrastructure has translated directly into stronger capital inflows.
Saudi Arabia retained its position as the region’s leading destination for venture capital investment for the third consecutive year, capturing 45 percent of total regional funding with investments worth SR6.4 billion. In addition, 27 global technology companies have established regional headquarters in the Kingdom.
Human capital as a growth engine
Investment has extended beyond infrastructure to the development of national talent as employment in the technology and AI sectors reached 426,000 by the end of the first quarter of this year, while 660 AI-focused startups received support.
Women’s participation in the technology sector rose to 35 percent, exceeding the average levels in both Silicon Valley and the EU.
These achievements helped Saudi Arabia rank first in the Women’s AI Empowerment Index, while also placing third globally in Stanford University’s Leading AI Models Index.
Technology sector continues growth
Saudi Arabia’s information and communications technology market continued its strong growth, reaching SR199 billion last year, a 90 percent increase compared with 2017.
The market comprised SR115.4 billion in information technology, up 167 percent since 2017, and SR83.5 billion in telecommunications, representing 89.5 percent growth since 2018.
The number of listed technology companies on the Saudi stock market also rose from just two in 2020 to 26 by the end of 2025.
Growth momentum continued in 2026, as the IT market reached SR28 billion in the first quarter alone.
Emerging sectors also gained traction, including digital content, valued at SR24.5 billion, and electronic gaming, worth SR6.1 billion.
Entrepreneurship ecosystem reaps the rewards
Long-term investments in the innovation ecosystem are beginning to pay off, with Saudi Arabia producing eight unicorn companies and being named StartupBlink’s Country of the Year 2025 for its rapid growth in the global startup ecosystem.
The Center of Digital Entrepreneurship, or CODE, has helped attract 212 startups, supported 1,400 technology companies through its programs, and contributed to the creation of more than 40,000 jobs.