Saudi’s Davos is no longer such a desert

Shifting sands. Saudi Arabia’s big shindig is getting bigger. About 4,000 delegates showed up for desert kingdom’s first Future Investment Initiative in 2017. This year’s garing attracted twice that number, suggesting that country’s Vision 2030 project to shed its historical dependence on oil has gained some traction.

conflab often kwn as “Davos in desert” has a turbulent history. In 2018, top bosses of Western blue chips like Blackstone, JPMorgan and BlackRock stayed away following murder of journalist Jamal Khashoggi by Saudi nts. So did SoftBank boss Masayoshi Son, who previous year had shared a st with Crown Prince Mohammed bin Salman after Saudi state contributed $45 billion to his tech-focused Vision Fund.

This year, corporate titans were very much back in force at King Abdulaziz International Conference Center, though y still chose ir talking points with care. Attendees like BlackRock’s Larry Fink, Blackstone’s Steve Schwarzman, Ken Griffin of Citadel, and Ruth Porat, president of Google owner Alphabet, spent relatively little time discussing war raging in Israel, Gaza and Leban a mere 800 miles away.

Participants were much more er to expound on dominant investment topic of moment: artificial intelligence. Son, despite recording underwhelming returns on his Vision Fund and dumping a 5% stake in chipmaker Nvidia long before it became a $3.4 trillion company, predicted that AI could be worth $9 trillion a year and that machines would become 10,000 times more intelligent than humans by 2035. Tesla boss Elon Musk beamed in by video link to assert that AI would surpass collective intelligence of all humans before end of decade.

likes of Fink and Schwarzman are more or less obliged to attend, as Saudi has invested billions of dollars in ir funds and deals. But balance has shifted. While country is still way short of some key Vision 2030 targets, such as lifting share of n-oil exports and increasing private sector’s share of GDP , it has scored some successes. proportion of Saudi women in workforce, for example, has reached almost 36%, nearly double figure in 2016, and well ahead of original 30% target.

A tangible rise in leisure activities is also making Saudi a less forbidding place to live and work. Apart from n-alcoholic drinks, a rooftop reception for Gulf venture capital types at Huqqa bar on Wednesday evening offered a vibe little different to that of a high-end establishment in London.

test for Saudi’s overhaul remains foreign direct investment. Despite its oil riches, Riyadh wants its investment conflab to be a forum where Western companies unveil local acquisitions, factories and headquarters. That hasn’t shown up in data. In 2023 direct investment inflows amounted to only 1.2% of GDP, according to Capital Ecomics – way off Saudi’s initial target for 2030 of 5.7%.

re are some signs of progress. Canadian investor Brookfield Asset Manment and Saudi’s $950 billion Public Investment Fund on Wednesday anunced creation of a $2 billion private equity fund which will aim to invest half its capital in kingdom. country needs lots more of se types of deals. latest garing in Riyadh at least suggests that is less unlikely than it once seemed.

Context News

Saudi Arabia’s Future Investment Initiative took place in Riyadh between Oct. 29 and Oct. 31.