Finance

Wall Street and Tech Royalty Seize Lucrative Investment Opportunities in Saudi Arabia Amid Mideast Conflict

Top finance and tech leaders gather to explore lucrative investment opportunities in Saudi Arabia amid rising regional tensions.

Saudi Arabia will host the biggest names in finance and technology this coming week in a test of investor appetite for the kingdom’s ambitions of transforming itself into a global hub at a time of widening regional conflict.

The Uncertain Climate for Investment Opportunities in Saudi Arabia

International executives will contend with a region rocked by geopolitical tensions, particularly the potential for military confrontation between Israel and Iran. They will land in a country increasingly aware of the limits of its vast oil wealth.

However, those arriving at the Future Investment Initiative—often dubbed Davos in the desert—seem undeterred, sensing an opportunity to engage with Crown Prince Mohammed bin Salman’s trillion-dollar Vision 2030 economic remake. Goldman Sachs Group Inc.’s David Solomon, Citigroup Inc.’s Jane Fraser, and BlackRock Inc.’s Larry Fink have become regulars at the Riyadh summit and are set to return this year.

AI and Technology Focus on Investment Opportunities in Saudi Arabia

Reflecting Saudi Arabia’s focus on technology and artificial intelligence, they’ll be joined by prominent names in those industries. Alphabet Inc. President Ruth Porat and TikTok Inc. Chief Executive Officer Shou Chew are set to speak at the summit for the first time. Benjamin Horowitz, tech entrepreneur and co-founder of venture capital giant Andreessen Horowitz, is also making an appearance.

Wall Street and Silicon Valley have increasingly turned to the oil-rich Middle East as liquidity tightens in other parts of the world, especially China. Saudi Arabia commands nearly $1 trillion in sovereign wealth, though the Crown Prince wants titans of industry to stop deploying that money overseas and instead help support his domestic ambitions.

Geopolitical Tensions Impacting Investment Opportunities in Saudi Arabia

Yet the backdrop is one of increasing uncertainty. Saudi foreign policy has focused on lowering regional tensions to attract foreign capital and technological know-how. However, recent events have highlighted how unstable the region can be.

“The impact of regional instability on the prospects for foreign investment is completely negative, with the possible exception of the defense industry,” said Gregory Gause, Professor of International Affairs at Texas A&M University. Capital is “not attracted to conflict regions, even if the country is not an immediate participant in the conflict.”

Commitment to Development Plans and Investment Opportunities in Saudi Arabia

To be sure, Saudi Arabia is still pushing ahead with its development plans. Deals worth more than $28 billion are likely to be announced over the next week by executives from around the world, according to Richard Attias, CEO of the FII Institute.

Some of these will focus on AI, including a potential new fund with Andreessen Horowitz that could grow to as large as $40 billion. The kingdom is also expected to announce a new company that will invest at least $10 billion in making Saudi Arabia a top global producer of hydrogen—a low-carbon fuel essential for the world’s transition away from fossil fuels.

Expansion of Investment Opportunities in Saudi Arabia

Ahead of the event, General Atlantic said it’s opening its first office in the Middle East—in Saudi Arabia—to scout for more deals in the region. Two exchange-traded funds will make their trading debuts in Riyadh, giving Saudi investors access to Hong Kong stocks—a reflection of the kingdom’s growing ties with China as it looks to boost investment flows with its biggest trading partner. Hong Kong Financial Secretary Paul Chan, and the Commissioner for the Belt and Road, Nicholas Ho, will speak at FII as some of the highest-profile speakers from Asia.

Still, the regional conflict weighs heavily on global investor sentiment in the Middle East. Saudi Arabia, the biggest Gulf economy, is feeling some of that pressure.

Conclusion: Ongoing Interest in Investment Opportunities in Saudi Arabia

The number of actively-managed emerging market funds with Saudi exposure had been rising sharply until earlier this year but stalled at around 56% as tensions between Israel and Iran escalated, according to Copley Fund Research. The data show that the number of funds invested in the Saudi stock market fell slightly between March and September this year, making the country the third-biggest underweight after Taiwan and India.

The organizers of the Riyadh jamboree remain confident, with about 7,000 people registered to attend this year’s event. That’s higher than the numbers for last year’s summit, which took place just after the current conflict in the region started.

Even so, investors are coming “despite what is happening in the world,” Attias said. “The show must go on.”