Saudi spends $8.5 billion on digital government during 2025
Government digital spending on AI and emerging tech grew 20% last year
#SaudiArabia #DigitalGovernment – Saudi Arabia’s Riyadh-based Digital Government Authority (DGA) has published its Government Spending Report on ICT Services 2025, revealing total government ICT spending of SAR 31.9 billion ($8.5b) across more than 6,145 contracts. The DGA reported that government spending on artificial intelligence and emerging technologies rose 20 percent compared to 2024, while cloud computing expenditure jumped 42 percent. The report also shows that government digital spending generated more than SAR 9.5 billion ($2.53b) in direct economic value added, supported over 7,000 jobs, and delivered SAR 3.5 billion ($930m) in indirect economic impact across the Kingdom.
SO WHAT? – Over and above tracking government technology spending, the new report helps to map the pace and direction of Saudi Arabia’s digital transformation. The 20 percent rise in AI investment and 42 percent surge in cloud spending are not incremental increases. The high growth in emerging tech spending is consistent with a government that has completed its foundational digital infrastructure and is able to adopt new technology at speed. According to the DGA’s Emerging Technologies Adoption Readiness Index published in April, 76 percent of government entities are ready to adopt and activate emerging technologies. The new data released by the DGA this week supports this finding.
KEY POINTS:
Saudi Arabia’s Digital Government Authority (DGA) has published its Government Spending Report on ICT Services 2025. Total Saudi government ICT spending reached SAR 31.9 billion ($8.5b) in 2025, with government contracts valued at approximately SAR 31.7 billion ($8.45b) across more than 6,145 contracts.
The DGA describes the figures as reflecting increased spending efficiency in 2025 following the completion of several core digital infrastructure projects in past years.
Government spending on AI and emerging technologies rose 20% in 2025 compared to 2024, while cloud computing expenditure increased by 42% over the same period. Both figures indicate that the Saudi government is shifting its ICT investment mix decisively toward AI and intelligent technologies.
Government digital spending generated more than SAR 9.5 billion ($2.53b) in direct economic value and SAR 3.5 billion ($930m) in indirect economic impact, supporting the creation of more than 7,000 jobs. Local contracts accounted for 49% of government software procurement (a strong indicator of growing domestic digital capability).
SMEs captured 29% of total government ICT contract value in 2025, with contracts awarded to small and medium-sized enterprises amounting to approximately SAR 9.23 billion ($2.46b). Their share of overall government digital spending reached 23%, reflecting deliberate policy to broaden private sector participation in government digital projects.
National framework agreements delivered significant procurement efficiencies, with purchase orders executed through these agreements exceeding SAR 5.16 billion ($4.26b) and benefiting more than 500 government agencies and 65 companies. The agreements accelerated procurement processes and reduced costs across the public sector.
Cloud computing, AI and beneficiary experience improvement are identified as the primary investment priorities driving spending growth. The shift toward these categories follows completion of the core digital infrastructure buildout that dominated government technology spending in previous years, showing that Saudi digital government has entered a more advanced digital phase.
The DGA report connects ICT spending directly to Saudi Arabia’s international competitiveness, noting the Kingdom ranked first on the Tortoise Intelligence Government Strategy Index for Artificial Intelligence in 2023, ahead of Germany and China. The report frames continued investment as essential to maintaining and strengthening that global position.
The Digital Government Authority oversees digital transformation across all Saudi government entities, setting technical standards, supervising government cloud governance, building national digital capabilities and supporting public and private entities with digital government services.
ZOOM OUT – The DGA spending data sits within a broader picture of Saudi Arabia’s global leadership in public sector AI adoption. The Public Sector AI Adoption Index 2026, published by UK-based research consultancy Public First for Washington-based think tank the Center for Data Innovation, ranked Saudi Arabia first globally across all five dimensions of AI adoption: enthusiasm, empowerment, enablement, embedding and education. The index found that approximately two-thirds of Saudi government workers use AI tools daily, 77% report organisational investment in AI infrastructure, and nearly half have been using AI for more than a year. The report classified Saudi Arabia alongside Singapore and India as an Advanced Adopter.
[Written and edited with the assistance of AI]
Source: SPA, MEAIN
Read more about Saudi Arabia’s AI initiatives:
76% of Saudi government ready for emerging tech (Middle East AI News)
Saudi designates 2026 as Year of Artificial Intelligence (Middle East AI News)
Saudi Arabia leads world in public sector AI adoption (Middle East AI News)
Saudi building world’s largest government data centre (Middle East AI News)
New sandbox opens Saudi superapp to private sector (Middle East AI News)