Saudi Arabia's fund refocuses on AI, logistics, and religious tourism
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Saudi Arabia’s $925 billion Public Investment Fund is shifting focus from Vision 2030 gigaprojects, such as NEOM, to near-term returns via AI, logistics, rare earths, and religious tourism.
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Saudi organizer at the Future Investment Initiative conference, "FII", smiles as she welcomes participants, in Riyadh, Saudi Arabia, on October 29, 2019. (AP)
Saudi Arabia is preparing a significant shift in the focus of its $925 billion Public Investment Fund (PIF), moving away from the real estate-driven Vision 2030 projects that have dominated its development agenda over the past decade. A source with direct knowledge of the matter told Reuters that the new strategy will prioritize near-term returns through investments in logistics, mining, religious tourism, and artificial intelligence.
According to Reuters, this strategic repositioning comes as mounting pressure is placed on PIF and its portfolio companies to deliver stronger financial results in the near term. While the original vision centered on iconic real estate developments such as NEOM, many of these gigaprojects have been delayed, are underperforming, or have yet to yield returns proportionate to their high costs.
Introduced by Crown Prince Mohammed bin Salman in 2016, Vision 2030 aimed to transform the Saudi economy through high-profile developments like NEOM, a planned $500 billion smart city in the desert by the Red Sea. Other projects include the Trojena winter sports complex in the kingdom’s northern mountains, and Red Sea Global, a collection of ultra-luxury hotels.
Despite their ambitions, Reuters mentioned, many of these ventures have faced setbacks. NEOM, originally envisioned as a linear city for 9 million residents, has seen construction scaled back. According to the report, work is now concentrated on completing just a 2.4-kilometer stretch that includes a stadium intended for future World Cup use. Meanwhile, officials are reportedly considering postponing Trojena’s hosting of the 2029 Asian Winter Games to 2033.
Saudi Arabia bets big on AI and data infrastructure
The PIF strategy shift reflects a growing interest in artificial intelligence and data infrastructure. At the Future Investment Initiative (FII) forum this week in Riyadh, AI dominated the agenda, with robotic technology and digital city models on full display.
Saudi-owned Humain, a PIF-backed AI firm, announced plans to build around 6 gigawatts of data center capacity, powered by the kingdom’s energy resources. "Let’s just put it this way, everything we ask for, we get," said Humain CEO Tareq Amin, when asked about funding.
In addition to AI, PIF is focusing on religious tourism in Mecca and Medina and the expansion of the mining sector. The source revealed that Saudi Arabia holds large, undisclosed reserves of rare earth minerals, which are set to become a strategic pillar in the kingdom’s economic diversification.
On a related note, earlier this month, Crown Prince Mohammed bin Salman announced a new expansion project at the Grand Mosque in Mecca, which will add nearly 900,000 new prayer spaces, part of a broader effort to position religious tourism as a sustainable revenue stream.
As part of its updated strategy, PIF is also expected to reduce its international exposure, which had previously made up 30% of its portfolio. PIF Governor Yasir Al-Rumayyan said last year that the fund would aim to bring this figure down to 18–20%, reallocating more capital toward domestic priorities.
