Saudi Arabia is pulling back on a global spending spree to focus on its own projects

• Saudi Arabia’s wealth fund has pumped billions into global entertainment, sports, and infrastructure.
• Now the Kingdom plans to cut its foreign investment to prioritize domestic spending.
• AI is the new focus of investment as Saudi Arabia looks to position itself as a global technology hub.

Saudi Arabia is pulling back on its global spending spree to focus on domestic investments.

Yasir Al Rumayyan, governor of the Public Investment Fund (PIF), said on Tuesday the kingdom planned to reduce the proportion of foreign investments made by the sovereign wealth fund from 30% to about 18% of its portfolio.

“We’re more focused on the domestic economy and we’ve been achieving and doing so many big things,” Al Rumayyan told delegates at the Future Investment Initiative in Riyadh. Saudi Arabia’s annual business conference has been dubbed “Davos in the desert” in a nod to the World Economic Forum meeting in Switzerland each January.

The absolute dollar amount for overseas deals was still increasing, the PIF chief said.

In recent years, the PIF has pumped billions into high-profile assets, including global sports teams, entertainment, airport infrastructure, and Uber. The fund’s assets are worth about $925 billion.

The spending is part of Saudi Arabia’s Vision 2030 plan to reduce its economy’s dependence on oil and transform the country into a significant global economic player.

Investors have flocked to the FII conference in previous years to take advantage of the multi-billion dollar deals struck at the event. The total at last year’s conference reached almost $18 billion, the Saudi Press Agency reported.

The kingdom has already been slowing its cash flows and telling foreign fund managers to invest more in Saudi Arabia if they want to secure deals.

The PIF’s traded stocks in the US fell from about $35 billion at the end of 2023 to $20.6 billion at June 30, The Financial Times reported.

Al Rumayyan said that investors were already changing their approach. “People used to come to us and ask for money. We are now seeing a shift from people wanting to take our money to people wanting to co-invest.”

The PIF governor also spoke about Saudi Arabia’s ambitions to become a top destination for AI companies and investors, saying that the technology’s economic impact made it a driver of national power.

“We either have discussions or initial discussions to invest in AI and the reason why we are investing in AI is Saudi Arabia is very well positioned to be a global hub, not only a regional hub,” Al Rumayyan said.

The technology could add nearly $20 trillion to the global economy by 2030, he added.

In September, Saudi Arabia held the third Global AI Summit, attracting a host of high-profile leaders and dealmakers. The PIF is also in talks to partner with prestigious venture capital firm Andreessen Horowitz on an AI fund, with a potential value of $40 billion, Bloomberg reported.

The new focus on domestic investment comes as Saudi Arabia’s spending on Neom, its futuristic megacity in the desert, hit $1 trillion.

Neom’s scope appears to have been scaled back as the financial realities of the ambitious project hit home. Experts say Saudi has struggled to attract the foreign investment needed to fund the project’s lofty goals.

A select group of guests were recently invited to visit Sindalah, a luxury island resort in the Red Sea that is one of the first parts of Neom to become reality.