Saudi ‘Davos in the Desert’ kicks off, with focus on AI, urban megaprojects

Saudi Arabia opened a major investment conference featuring heads of state and members of the global business elite on Tuesday, as it seeks support for sprawling so-called “gigaprojects” and sky-high AI ambitions.

The ninth edition of the Future Investment Initiative in Riyadh, dubbed “Davos in the desert” after the annual conference in Switzerland, is being held against the backdrop of the recent ceasefire between Israel and the Hamas terror group in Gaza, as part of the US-backed peace plan for the territory.

US President Donald Trump has predicted that the deal will lead to Israel establishing ties with more countries in the region, and predicted earlier this month that Saudi Arabia and Israel will normalize ties by the end of this year.

The conference comes weeks ahead of Crown Prince Mohammed bin Salman’s expected trip to the US, his first since March 2018, months before the killing of Washington Post columnist Jamal Khashoggi at the kingdom’s consulate in Istanbul. In Washington, the de facto ruler is set to meet Trump, whose visit to Riyadh in May was marked by Saudi investment pledges worth $600 billion.

Saudi Arabia has long insisted that it will only formally establish ties with Israel if Jerusalem agrees to establish a time-bound, irreversible pathway to a future Palestinian state, which members of Prime Minister Benjamin Netanyahu’s right-wing government vehemently oppose.

But there still appears to be contact between the countries. Army Radio reported Sunday that an Israeli government delegation is likely to fly to Saudi Arabia in the near future to participate in an upcoming tourism conference taking place in the kingdom.

The conference is set to draw a roster of big names, including some 20 heads of state. Chinese Vice President Han Zheng, joined by several ministers and more than 150 business leaders, and Syrian interim President Ahmed al-Sharaa, are among the guests at FII this year.

Donald Trump Jr., the US president’s son, and the heads of US investment giants Goldman Sachs, JP Morgan and BlackRock are also gathering at the capital’s opulent King Abdulaziz International Conference Center, the former royal palace.

FII will once again try to lure investment dollars to Saudi Arabia as the world’s biggest oil exporter attempts to diversify its economy.

Yasir Al-Rumayyan, head of the Public Investment Fund, Saudi Arabia’s influential sovereign wealth fund, said foreign investment grew 24 percent to $31.7 billion last year.

“We have taken Saudi Arabia to the world and now the world is coming to Saudi Arabia,” he said in the opening keynote address.

But questions are swirling over Saudi Arabia’s gigaprojects — the major developments meant to herald its economic transformation — including NEOM, a futuristic new city priced at $500 billion.

Delays, personnel changes and major design rethinks have reportedly affected NEOM, at a time when declining oil revenues are swelling the Saudi budget deficit.

“FII is an important annual opportunity to drum up foreign investments to help finance the expensive and at times challenging economic transformation agenda,” said Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington.

“There is clearly a recalibration of spending priorities going on. So investors will be looking for where the money is headed going forward,” he added.

Karen Young, a specialist in Gulf economic policy at the Middle East Institute, said “pullbacks from some of the megaprojects” would not necessarily deter foreign investment, and instead “show fiscal discipline.”

Saudi Arabia will also be eager to show it is a genuine player in technology, especially artificial intelligence, where the wealthy Gulf powers are vying for prominence.

Deals are expected involving Humain, the AI company owned by Saudi Arabia’s Public Investment Fund, and several international companies, FII organizers say.

“Some of Saudi Arabia’s new tech companies are rather nascent entities, so they’ll be looking to assure audiences that the kingdom’s tech ambitions are very real, feasible and exciting,” said Mogielnicki.