Saudi Arabia to invest billions of dollars in technology and startups

Saudi Arabia is investing $6.4bn in the digital technologies of the future and the tech startups that will harness them.

The announcement was made during a major new tech event, known as LEAP, in the Saudi capital Riyadh.

Saudi Arabia has an emerging tech sector, with demand for IT rapidly increasing in its economy. According to IDC, organisations in the oil-rich nation, spent $33bn on IT and communications technology last year, as emerging technologies are adopted to adapt to the post-pandemic business environment.

The investments announced at LEAP are part of the Saudi government’s Vision 2030 programme, which is increasing focus on its digital economy, as part of the country’s economic diversification and its efforts to reduce its dependency on oil sales.

“These investments and initiatives are a manifestation of the Kingdom’s push toward the growth of the digital economy for the greater good of people, the planet and the prosperity of the Middle East and North Africa [MENA] region,” said Abdullah Alswaha, Saudi minister of communications and IT.

“They mark the next level of growth for the digital economy in Saudi Arabia, the MENA region’s largest technology and digital market.”

There are around 318,000 jobs in the Saudi Arabian technology sector, and companies including Google, Alibaba, Oracle and SAP have invested more than $2.5bn in Saudi Arabia. Meanwhile, venture capital investment last year was more than the two previous years combined.

Like other countries in the Middle East, Saudi Arabia is reducing its economic dependency on oil and gas. Tech is seen as a critical part of this, with the use of advanced technology within Saudi companies increasing, as well as investment in tech startups.

The investment announced at LEAP includes $1bn from Saudi Aramco Ventures through its Prosperity7 initiative.

Amin Nasser, CEO at Saudi Aramco, said: “Prosperity7 will connect the dots through big ideas, top talents and disruptive technologies from around the world as we look beyond the energy value chain to areas like healthcare, education and blockchain, for viable solutions to the world’s most pressing challenges.”

An investment of $1bn by the Saudi Telecom Company (STC) will see spending on submarine cables and datacentres to strengthen the country’s role as a digital hub.

STC is has formed a partnership with Huawei, which will see manufacturing facilities for datacentre equipment and hardware established in Saudi Arabia.