The U.S.-Saudi Arabia relationship under the second administration is quickly being defined by cooperation in AI and hi-tech sectors, rather than purely focusing on oil. (Photo by Win McNamee/Getty Images)
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Prince Mohammed bin Salman recently wrapped up a successful visit to the White House, boosting the 80-year-old strategic relationship between Saudi Arabia and the U.S. The desert kingdom’s quest for technological progress was front and center. Yet, making Saudi Arabia a global leader in AI remains challenging.
The Future Investment Initiative, otherwise known as “Davos in the Desert,” an annual event held in Riyadh showcasing the plans of Vision 2030, has taken center stage for AI development. Saudi Arabia, which currently lags behind AI field leaders China and the U.S., aims to become a major player in the global AI and data infrastructure race. The country’s pivot towards the AI sector signifies more than potential economic diversification for the region as it seeks to protect itself against oil price fluctuations. If successful, it could also mark a shift in the Middle East’s and the Arab world’s competition for global power. However, there is a rocky road ahead for these ambitions.
Saudi Arabia’s AI Gambit
Saudi Arabia may be trailing behind other competitors in the AI race, but not for lack of trying. Established in 2019, the Saudi Data and Artificial Intelligence Authority has been attempting to push the kingdom towards AI advancement by focusing on research and development, and the pathways to becoming a leading AI economy. Investing in AI development is seen as a way to help boost Saudi Arabia’s position in the race and move beyond its oil economy.
The country’s ambitious investment program is driven by an understanding of the substantial benefits of building and maintaining an AI infrastructure. The kingdom’s massive oil revenue could be utilized for AI R&D, data centers, and other energy-intensive enterprises. AI development may provide a means for Saudi Arabia to escape its dependence on energy exports and achieve economic diversification.
Saudi Arabia’s focus on AI development shows its intent to diversify away from its oil economy and vie for leadership in burgeoning AI and data center industries. (Photo by Nicolas Economou/NurPhoto via Getty Images)
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Focusing on computing power, Saudi Arabia wants to develop relationships with leading AI and technology firms. Notably, the launch of the country’s signature “HumAIn” platform and its partnership with the American firm Qualcomm were timed with President Trump’s visit to the region in May, positioning the kingdom’s hi-tech ventures as a cornerstone of the modern Saudi-U.S. relationship.
Partnerships with the U.S. firms leading in areas such as chipmaking and software systems can foster more trade and investment between the two countries. Opportunities to partner with China may prove less abundant as it seeks to import advanced chips from the U.S., but Saudi Arabia’s unique position in the race may enable it to negotiate with both tech leaders.
Infrastructure development by the U.S. and China in Saudi Arabia could shift the geopolitics of the tech race. Establishing relationships with rivals and allowing them to develop tech ecosystems within a consolidated hub might be a signal by Riyadh that the kingdom is in no one’s pocket. The tech leader who integrates first in Saudi Arabia will almost certainly gain an advantage in the region.
Limitations to Saudi AI Development
Despite Saudi Arabia’s ambitions to become an AI powerhouse, constraints are likely to limit the development of the infrastructure crucial to sector growth. Data centers require immense amounts of water and the kingdom’s resources are limited. Given Saudi Arabia’s geographic location, acquiring the water needed to cool data centers poses challenges. Water desalination is a particularly energy-intensive process, and the abundant solar energy currently produces water that is too expensive to drink, let alone cool data centers. Despite producing massive amounts of oil, the Kingdom is lacking ample gas supplies.
The Arabian desert’s high temperatures make cooling through water even more costly and challenging to maintain. In addition, building infrastructures in a desert environment incur additional costs in areas such as air-cooling efficiency and grid stability.
Human capital and resources are equally important. Saudi Arabia currently has a shallow talent pool, as the Kingdom allowed religious education through college for decades to the exclusion of STEM and other areas of study, graduating millions of people without marketable skills. Acknowledging this gap is the first step to growth, but it is still a barrier to implementing the vision that the kingdom’s leaders have for its future. Once the infrastructure is built and ready for use, the country’s ambitions in competitive and beneficial AI research will need to be backed by billions of dollars and extensive expertise.
Saudi Arabia’s solar energy is not enough to aid in the cooling of data centers as they grow in number across the country. (Photo credit should read FAYEZ NURELDINE/AFP via Getty Images)
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The Saudi leadership clearly understands the imperative to transition from a 20th century oil economy to 21st century high tech-based society. But the nation’s push for AI requires more than meeting with tech executives and establishing relationships with industry leaders happy to take the Kingdom’s money; it also demands a deep understanding of what will be needed to succeed. Geographical, technological, and human capital limitations determine what is currently possible and must be overcome if an AI ecosystem is to develop. Though Saudi Arabia’s pivot to the industries of the future is understandable and desirable, its leaders need to ensure that there is a wide societal buy-in, and it is fully equipped to usher in this new era of science and tech.
Source: https://www.forbes.com/sites/arielcohen/2025/11/26/saudi-arabias-push-for-ai-remains-a-challenge/
