Saudi includes launch of two tech giants in FY2025 budget
Saudi national budget to provide plenty of stimulus for ICT sectors
#Saudi #FY2025 - Saudi Arabia’s Ministry of Finance has included funding for two new multi-billion dollar technology ventures in the kingdom’s FY 2025 Budget, according to the new budget statement issued last week. According to the 2025 Budget report, the addition of the two new ventures will bring the Kingdom’s total of multi-billion tech groups to eight. The new companies are among the 2025 plans to boost the sector's GDP contribution, strengthen digital infrastructure, and position Saudi Arabia as the region’s technology leader.
SO WHAT? - Earlier this year Saudi Arabia’s Public Investment Fund (PIF) launched Alat, a semiconductor and electronics group with $100 billion funding. It has been rumoured for weeks that PIF will soon announce a new AI and AI infrastructure group with a similar level of funding. Code-named Project Transcendence, the new AI group could have a profound impact on the growth of Saudi’s AI sector, AI adoption across the public sector and the country’s ability to develop new AI technologies. It now seems possible that the new AI venture may not be announce until 2025.
Some key details from the Ministry of Finance’s FY2025 budget report:
Saudi Arabia’s Cabinet of Ministers, Chaired by Crown Prince and Prime Minister Prince Mohammed bin Salman, approved the national FY2025 budget on November 26th. The new budget statement was released on November 26th.
The FY2025 budget includes public expenditures of SAR 1.285 trillion ($340b), and forecasts public revenues at SAR 1.184 trillion ($315b), resulting in an expected deficit of SAR 101 billion ($26.9b).
According to the FY2025 Budget Statement, two new multi-billion-dollar tech companies will be launched by the end of FY2025, bringing the total to eight such companies.
The ICT sector is projected to grow by 5% by FY2025, solidifying Saudi Arabia's position as the largest technology market in the MENA region. IDC forecasts that the Kingdom’s ICT spending is to reach $43.5 billion by 2027.
The Ministry of Finance also notes that a Saudi-manufactured satellite will be launched as part of NASA's Artemis 2 mission to explore the moon, advancing the Kingdom’s space capabilities.
Government digital transformation will continue to progress, with cloud-based solutions expected to reach 50% penetration in FY2025, generating SAR 8 billion ($2.13b) in financial savings, enhancing user experience by 86%.
Saudi Arabia expects government agencies to increase AI adoption, while the National Data Bank (NDB) will expand its dataset volume and improve sharing mechanisms to facilitate broader access by stakeholders.
Use cases for the National Smart Cities Platform are also expected to grow, focusing in line with priorities such as safety, quality of life, and sustainability.
ZOOM OUT - The indications from Saudi Arabia’s FY2025 Budget Statement are that the government can be expected to continue to push digital transformation and digital economy initiatives forward as a top priority. ICT is now integral to the Kingdom’s robust commitment to economic diversification under its Vision 2030 development strategy. During the past few years there has been a marked increase in investment in cutting-edge infrastructure, innovation, and strategic partnerships. Now, in line with the recent surge in AI adoption, we can expect to see existing and new digital infrastructure plans orientated to meet the rising demand for AI compute.
LINKS
Download the FY2025 Budget Statement (PDF, English)
Download the FY2025 Budget Statement (PDF, Arabic)
Read more about Saudi’s government-backed technology ventures:
Saudi government plans $100b AI group (Middle East AI News)