Kingdom Shifts Focus from Megaprojects to High-Tech Innovation
Saudi Arabia is making a major shift in its economic development strategy by redirecting billions of dollars from the $500 billion Neom megaproject toward artificial intelligence (AI) and advanced technology sectors. The move signals a new phase in the kingdom’s long-term plan to diversify its economy away from oil dependence as global energy markets face mounting pressure from declining crude prices.
The decision comes amid a noticeable slowdown in progress on Neom, the futuristic urban development once described as the centerpiece of Vision 2030. According to the kingdom’s 2026 pre-budget statement, Neom received no mention for the first time in three years, suggesting a sharp reduction in new funding commitments. Construction activity has slowed on The Line, Neom’s 170-kilometer linear city concept, with some workers reportedly reassigned to other state projects.
Saudi Arabia’s AI Ambitions Take Center Stage
The financial pivot is centered around HUMAIN, a flagship AI company backed by the Public Investment Fund (PIF) and launched in May 2025. HUMAIN is spearheading Saudi Arabia’s bid to become a global leader in artificial intelligence and next-generation computing.
The company has announced a $10 billion venture capital fund to invest in AI startups across the United States, Europe, and Asia, aiming to secure a stake in the world’s most promising technology firms. HUMAIN executives have stated that Saudi Arabia intends to leverage its financial power to “play a central role in every layer of the global AI ecosystem, from chip design to cloud infrastructure and data innovation.”
Massive AI Investments and Global Partnerships
As part of its rapid AI expansion, Saudi Arabia has already signed $23 billion worth of agreements with leading U.S. technology giants including Nvidia, AMD, Amazon Web Services, and Qualcomm. These partnerships are designed to accelerate the kingdom’s access to advanced computing hardware, software frameworks, and AI development tools.
HUMAIN has reported that its existing data centers have reached full capacity, highlighting surging domestic demand for AI infrastructure. The company plans to develop 6.6 gigawatts of AI data center capacity by 2034, positioning Saudi Arabia as a regional hub for high-performance computing and digital innovation.
Analysts say this aggressive investment reflects a broader ambition to ensure the kingdom does not remain solely reliant on energy exports. Instead, it aims to build a diversified, technology-driven economy capable of competing with global innovation leaders.
Economic and Strategic Timing Behind the Shift
The timing of the policy shift aligns with the Future Investment Initiative (FII) conference taking place in Riyadh from October 27–30, where AI is expected to dominate discussions. The global finance event has drawn top executives, including Jamie Dimon (JPMorgan Chase), David Solomon (Goldman Sachs), and Larry Fink (BlackRock) — all eager to understand how Saudi Arabia’s recalibrated strategy will affect global investment flows.
The move also comes as oil prices have dropped by more than 10% in 2025, reducing state revenues and pressuring the kingdom to diversify faster. Finance Minister Mohammed Al-Jadaan underscored the shift in a recent statement, saying that any project or policy that no longer aligns with Saudi Arabia’s strategic goals “will be re-evaluated or halted without hesitation.”
Industry observers say the reallocation of funds from Neom to AI demonstrates the leadership’s willingness to adapt quickly to economic realities and focus on areas promising higher long-term returns.
AI’s Growing Economic Impact in the Kingdom
According to official forecasts, the AI sector could contribute $135.2 billion to Saudi Arabia’s GDP by 2030, reflecting its vast potential to transform industries ranging from finance and healthcare to logistics and manufacturing.
By investing heavily in AI research, training, and data infrastructure, Saudi Arabia seeks to develop a knowledge-based economy that supports local talent while attracting international partnerships.
The pivot away from Neom also suggests a pragmatic response to global trends. While the megacity concept once symbolized Saudi Arabia’s futuristic aspirations, the AI revolution now promises more immediate economic dividends and global influence.
Balancing Vision 2030 with New Realities
Despite reduced attention to Neom, Saudi officials maintain that Vision 2030’s overarching goals remain unchanged. The program’s focus is still on innovation, sustainability, and diversification, but execution priorities have shifted toward technology sectors with faster returns and scalable benefits.
Economic experts argue that this realignment underscores Saudi Arabia’s determination to remain competitive in the face of global digital transformation. By channeling resources into AI and high-tech ventures, the kingdom is positioning itself as a digital powerhouse in the Middle East, one capable of shaping the region’s technological future.
