Amin H. Nasser, President and CEO of Aramco, Saudi Arabia, speaks at the Future Investment Initiative (FII) in Riyadh, Saudi Arabia, October 29, 2024.
Hamad Mohammed | Reuters
When you think of Saudi Arabia, the first thing that comes to mind may be its vast oil wealth.
While oil continues to drive the Saudi economy, the kingdom is now expanding into areas such as artificial intelligence, tourism and sports to diversify its means of growth.
More than half (50.6%) of the Saudi economy is now “completely decoupled” from oil, according to Saudi Investment Minister Khalid al-Falih.
“This proportion is increasing,” al-Fail told CNBC’s Dan Murphy, adding that while government revenue used to come almost entirely from oil money, 40% of revenue now comes from sectors and sources “not related to oil.”
“We have achieved great results, but we are not satisfied. We want to do more. We want to accelerate the kingdom’s diversification and growth story,” he said.
Saudi Arabia is doubling down on fast-growing fields such as artificial intelligence, which it lists as one of its new growth areas, and Al Fayr said the kingdom will become a “major investor” in the development of AI applications and large-scale language models. Saudi Arabia also plans to build data centers “at a scale and at competitive costs unattainable in other countries.”
“AI has emerged in the last three to four years and will undoubtedly define the economic future of countries. Those who invest will lead the way, and those who lag behind will unfortunately lose out,” he said.
On Monday, Jonathan Ross, CEO of AI chip company Groq, told CNBC that AI infrastructure relies on surplus energy. According to PwC, the country could generate more than $135 billion in benefits by 2030 thanks to AI.
According to Saudi Arabia’s quarterly budget performance report, total government revenue for the first half of 2025 was 565.21 billion Saudi riyals ($150.73 billion), with oil accounting for 53.4% of the country’s total revenue, down from 67.97% in the same period in 2019.
In 2024, the country reported full-year GDP growth of 1.3%, mainly due to a 4.3% increase in the non-oil sector. Meanwhile, oil activity decreased by 4.5% year-on-year.
The country’s sovereign wealth fund, the Public Investment Fund, has been acquiring stakes in tech giants, video game publishers and soccer clubs to use oil revenues to diversify into other sectors.
PIF acquires stake in Video Game Heavyweight electronic arts, Established SoftBank Vision Fund with Masayoshi Son SoftBank Group Corp. In 2017, it acquired Newcastle United of the English Premier League, and in 2021 it acquired Newcastle United of the English Premier League.
Asked whether falling oil prices were putting pressure on Saudi Arabia’s economy and government revenues, Al-Falih said the country had not cut its budget or cut public spending.
Oil prices will fall in 2025, with Brent crude spot prices down 13.4% so far this year, according to FactSet. Saudi Arabia’s oil revenues fell by 24% in the first half of 2025 compared to the same period last year.
Al Falih said the government will continue to work on all activities that require government spending, noting that the PIF has grown six-fold since its establishment, approaching nearly $1 trillion in capital deployed across the country’s strategic areas of interest.
Tourism is also an important growth area for Saudi Arabia. The country’s Tourism Minister Ahmed Al-Khateeb told CNBC that the sector’s share of GDP has increased from 3% in 2019 to 5% in 2024.
“We are (opening) resorts, new airlines, new airports, the number of which is increasing, and we are focusing on countries and visitors coming from outside to experience our great culture,” Al-Khatib stressed.
The Minister of Tourism also expressed confidence that the sector aims to contribute 10% of GDP by 2030 and eventually raise it to 20%.
“This 20% will help diversify the Saudi economy and make it more sustainable,” he added.
