DUBAI/MILAN/PARIS: The naming of a new boss at Etihad Airways presents the Gulf carrier with an opportunity to rethink its aggressive expansion strategy after the failure of minority-owned Alitalia underlined the big barriers to global growth. Ray Gammell was appointed interim CEO this week, days after Alitalia sought bankruptcy protection with $3.3 billion of debt. He replaces veteran boss James Hogan.
Hogan’s strategy was to buy up minority stakes in myriad airlines but the struggles of that strategy, most recently with Alitalia, are emblematic of a quandary peculiar to the industry. The path to growth for airlines often lies in gaining access to rivals’ routes. Yet in the EU, which mainly operates as one nation in aviation, foreigners cannot majority-own an airline. At Alitalia, the lack of full control meant that Etihad could not deal effectively with labor problems.
Since 2011, Abu Dhabi’s state-owned Etihad has spent billions of dollars buying minority stakes from Europe to Australia as it races to catch up with regional rivals Emirates and Qatar Airways.
Alitalia was Etihad’s eighth and most high-profile bet. But the €560 million ($609 million) investment lies in tatters, placing Hogan’s wider strategy under the microscope after staff overwhelmingly rejected its latest restructuring plans. Now the future of Etihad’s other leading investment, in Air Berlin, is also in doubt as the Gulf carrier pursues a strategy review that began last year. Like Alitalia, the German carrier has made big losses and it said two weeks ago it was seeking a new partner, which could include a new investor.
An Etihad spokesman said its review was ongoing but declined to comment on how its strategy might change or the impact of Alitalia’s failure on its global plans.
But a senior source at the Gulf carrier said lessons would be learned from the Italian investment and they would play a role in shaping future strategy.
Etihad’s strategy has allowed it to cut costs by pooling items like airplane procurement while offering a larger network; it says it brings together 600 destinations and over 700 aircraft.
Hogan’s “approach to partnerships did not pan out, but a few of his principles are still valid,” said Will Horton, a senior analyst at Australian aviation consultancy CAPA.
Etihad’s efforts to grow through minority stakes have at times been compared to Swissair’s failed “Hunter” strategy of the 1990s. Swissair’s buying binge, often acquiring stakes in ailing airlines, contributed to huge losses which eventually saw it grounded in 2001 and sold to Germany’s Lufthansa in 2005.
Hogan has always rejected the comparison, saying Etihad was doing things differently to Swissair and had demonstrated it could control costs. Etihad and its rivals have demonstrated spectacular growth but are increasingly pressured by a slowing Gulf economy due to relatively low oil prices. They have chosen different strategies to sidestep the regulatory dilemma governing foreign ownership and pursue global expansion.
Qatar Airways, like many other carriers, has entered one of three global alliances. These give some access to other carriers’ traffic rights without breaking ownership rules but allow only limited control over route-planning and costs.
Dubai’s Emirates, by contrast, mainly operates alone — an approach that gives it control of over its network and costs but also means it carries all the risk. The Middle East’s largest airline reported a drop in annual profit on Thursday for the first time in five years.
As the youngest of the three major Middle Eastern carriers, 14-year-old Etihad has looked to catch up and followed a third path of buying into other airlines to expand its reach.
When Hogan rescued Alitalia in 2014 after months of negotiations, he had been encouraged by two reformist prime ministers, Enrico Letta and his successor Matteo Renzi. Letta flew to Abu Dhabi to help clinch the deal.
“When Etihad arrived in 2014, we thought this time it would finally work, that this was it,” said Alitalia pilot Stefano Di Cesare of the Fit-Cisl union. Yet, Italian industry leaders say Etihad underestimated the country’s tangled politics and chronic labor strife.
Italian executives, officials and unions said in interviews with Reuters that alienating Alitalia’s workforce was among a series of missteps that ended Etihad’s Italian dream. Many also say Etihad underestimated the blistering growth of low-cost carriers Ryanair and easyJet. Without a majority stake, Etihad’s influence was limited despite being the largest single investor on 49 percent. And despite the lure of Italy’s important tourism market, it was forced to watch Alitalia’s efficient rivals mop up the benefits.
“There is no doubt that the idea to manage the company from Abu Dhabi was a very serious mistake,” Italian Industry Minister Carlo Calenda told Parliament last week.
The Etihad spokesman said Alitalia had been in financial trouble for decades and that its investment was welcomed wholeheartedly in Italy. Etihad believed the new restructuring plan developed by Alitalia’s management would have addressed its problems, he added.
In Germany too, Etihad had seen Air Berlin, its first investment in 2011, as the door to unrestricted access in a market where it has limited traffic rights with its own planes. But that airline has seen losses widen to a record €782 million in 2016. For now, Etihad continues to provide funding. Air Berlin says Etihad has granted another loan facility of €350 million and a letter of support for at least 18 months. But industry sources say Etihad could exit Air Berlin by seeking a deal with German flag carrier Lufthansa, with which Etihad is keen to work.
Lufthansa CEO Carsten Spohr said on Friday he had held talks with Abu Dhabi about the future of Air Berlin, but that it was up to the emirate to resolve Air Berlin’s €1.2 billion debt problem, which also prevents Lufthansa buying it.
Other investments such as Air Serbia and Air Seychelles have been more successful. There, Etihad was given hands-on management control and benefited from close diplomatic ties.
Even as the carrier picks up the pieces of its European adventure, Etihad faces its own restructuring that sources close to the company say has seen near-daily redundancies.
This may also weigh on the strategic decision facing Gammell, as he takes up his interim post this week, followed in coming months by a permanent successor to Hogan.
New Etihad boss to rethink strategy after Alitalia dream fails
New Etihad boss to rethink strategy after Alitalia dream fails
Saudi finance firms lending surges to $26bn in 2024
- Finance sector is evolving rapidly, with the emergence of fintech-driven players complementing traditional non-bank lenders
RIYADH: Credit provided by finance companies in Saudi Arabia rose to SR96.26 billion ($25.67 billion) in 2024, marking a 13.6 percent increase compared to the previous year, according to the latest figures from the Saudi Central Bank.
Personal finance led the way, accounting for 29 percent of total lending, or SR27.6 billion. Auto financing followed closely at 26 percent (SR25.16 billion), while residential real estate loans comprised 24.27 percent, amounting to SR23.36 billion.
Although it represents a smaller share of total lending, credit card finance recorded the most significant growth, surging 52.4 percent year on year to SR1.92 billion.
Commercial real estate financing also saw robust expansion, rising 20 percent to SR4.92 billion. Auto and personal loans maintained solid momentum, growing by 18.8 percent and 18.6 percent, respectively.
The retail segment — including personal, auto, housing, and credit card financing — continued to dominate the portfolios of finance companies in 2024. Lending to micro, small, and medium-sized enterprises also played a key role, representing approximately 19 percent of total credit. This is nearly double the share of MSME lending seen among traditional banks.
In contrast, financing for large corporations remained limited, as major firms continued to rely on bank loans or capital markets to meet their funding needs.
Profitability in the sector also improved markedly according to SAMA data. Net income rose by 72.13 percent to SR2.86 billion, while return on assets increased from 2.59 percent in 2023 to 4.13 percent in 2024. Return on equity reached 9.58 percent, up from 6.97 percent the previous year.
Together, these trends indicate growing confidence in the sector, increased borrower demand, and improved cost management — factors that position finance companies for further expansion, particularly in underserved and fintech-driven lending segments.
In recent years, finance companies in Saudi Arabia have played an increasingly important role in expanding credit access, particularly for underserved segments such as SMEs and individuals outside the traditional banking network.
The expansion of finance companies in Saudi Arabia has been bolstered by regulatory reforms aimed at promoting financial inclusion and boosting competition. A significant milestone came in January 2023, when SAMA amended Article 8 of the Implementing Regulation of the Finance Companies Control Law, lowering the minimum paid-up capital requirement for firms focused on financing SMEs to SR50 million. The move was intended to attract investors and encourage the launch of specialized finance firms serving the SME sector.
In a further push to support fintech innovation aligned with the Kingdom’s Vision 2030, SAMA also set a minimum capital threshold of SR5 million for Buy-Now-Pay-Later providers.
These policy changes have led to a noticeable uptick in market participation. By the end of 2024, SAMA had licensed 62 finance companies operating across various segments, including personal finance, mortgage lending, leasing, and fintech-based services.
Despite representing just 3.26 percent of total lending in Saudi Arabia — compared to SR2.96 trillion in bank loans — finance companies are playing an increasingly vital role in the Kingdom’s financial ecosystem.
Unlike commercial banks, which benefit from extensive deposit bases and corporate lending capacity, finance companies are non-deposit-taking institutions that often serve niche or underserved markets.
Interest rates offered by finance companies typically exceed those of traditional banks, reflecting differences in funding sources and borrower risk profiles. While banks draw from low-cost deposits and operate with greater economies of scale, finance companies depend on equity, interbank loans, or capital markets for funding.
As a result, their annual percentage rates tend to be higher, especially when serving higher-risk customer segments.
Fintech expands footprint
Saudi Arabia’s finance sector is evolving rapidly, with the emergence of fintech-driven players complementing traditional non-bank lenders.
Among the most notable additions to the landscape are debt-based crowdfunding platforms, which are regulated by SAMA under the finance companies’ framework.
Unlike conventional finance companies such as Nayifat or Bidaya, which lend directly using their own capital and assume full credit risk, these platforms act as intermediaries.
They connect retail or institutional investors with borrowers — often micro and small enterprises — allowing investors to fund loans directly. The platforms themselves earn fees for facilitating the transactions, while the credit risk is borne by the investors, not retained on the platform’s balance sheet.
This innovative model is helping to bridge financing gaps for SMEs and underserved communities, in line with the Vision 2030 objective of expanding financial access and economic participation.
In a related move that highlights the sector’s momentum, Tamara Finance Co. became the latest company to receive SAMA licensing in March, bringing the total number of licensed finance companies in the Kingdom to 65.
The company was approved to offer consumer finance and BNPL services, further reinforcing SAMA’s commitment to fostering financial innovation.
Tamara, Saudi Arabia’s first fintech unicorn, achieved a $1 billion valuation in 2023 following a $340 million Series C funding round. Its rise coincides with a sharp increase in BNPL adoption across the Kingdom.
A 2024 report by rival platform Tabby revealed that 77 percent of Saudi consumers now use BNPL services — often for essential expenses such as education, healthcare, and insurance — challenging the perception that BNPL is primarily for discretionary spending. These developments underscore SAMA’s broader strategy to diversify credit sources, enhance consumer access to financing, and drive the shift toward a digital, cashless economy under Vision 2030.
AI-powered telemedicine reshapes Saudi healthcare landscape
- Kingdom is accelerating the deployment of AI technologies, fundamentally reshaping how healthcare is delivered
RIYADH: Saudi Arabia is fast positioning itself as a regional pioneer in artificial intelligence-driven healthcare, harnessing telemedicine and digital innovations to modernize its medical infrastructure and widen access to care —particularly in remote and underserved regions.
Guided by its ambitious Vision 2030 agenda and bolstered by rising investments in digital health, the Kingdom is accelerating the deployment of AI technologies, fundamentally reshaping how healthcare is delivered, managed, and experienced.
Vikas Kharbanda, partner and healthcare sector lead at Arthur D. Little Middle East, told Arab News that AI-driven telemedicine is allowing providers to move from reactive care to proactive health management, which is particularly important in remote areas where “physical infrastructure is difficult and costly to develop and operate.”
Historically, access to healthcare across the Arab world has been uneven, with rural populations often lacking access to specialized services. In Saudi Arabia, however, AI-enabled platforms are helping bridge these gaps by facilitating remote consultations, optimizing clinical workflows, and supporting early detection of disease.
One of the Kingdom’s flagship initiatives is the Seha Virtual Hospital, a fully digital facility that leverages AI for diagnostics and links medical specialists across various locations for real-time consultations. Kharbanda described Seha Virtual Hospital as “a starting point of showcasing the full spectrum capabilities of what is possible with the convergence of digital capabilities into the healthcare environment.”
“With rapidly emerging capabilities for virtual consultations, e-ICU, digital prescriptions and dispensing workflows, AI-enabled diagnoses augmentation the program is starting to demonstrate the potential of what a virtual care delivery model can potentially achieve and the value it can create for a health system,” he said.
Kharbanda added that the hospital “has created a platform from which individual capabilities can be picked and diffused in the whole health system — commercializing the infrastructure capabilities from the public sector into the private sector could help diffuse these capabilities very rapidly into the whole system.”
Another initiative is Nala, a digital platform that began using AI in 2022 to offer personalized care recommendations based on individual data. Nala integrates with wearables to monitor vital signs and flag potential health risks. In 2023, it was acquired by Integrative Health, a network of AI-led urgent care centers in the Kingdom.
Tech-enabled outreach
Telemedicine remains a cornerstone of Saudi Arabia’s digital health strategy. Virtual consultations are helping to ease the burden on hospitals and clinics by enabling patients to connect with healthcare professionals remotely—eliminating the need for travel and streamlining access to specialized care.
“Telemedicine could be a major enabler for access and AI capabilities, especially focused on health risk assessments, enabling remote diagnosis, triaging capabilities and potentially bringing together the financing and care delivery model in a more systematic fashion could fundamentally shift the way health and care is managed today in the market,” Kharbanda added.
Telemedicine could be a major enabler for access and AI capabilities, especially focused on health risk assessments, enabling remote diagnosis, triaging capabilities and potentially bringing together the financing and care delivery model in a more systematic fashion.
Vikas Kharbanda, partner and healthcare sector lead at Arthur D. Little Middle East
High smartphone penetration and widespread internet access have supported the uptake of these tools. Babylon Health, in partnership with Saudi Telecom Co., offers an AI-based app for symptom checking and consultations, while local platform Cura provides similar services with remote diagnosis and digital prescriptions.
AI: the game changer
Artificial intelligence is also being deployed to support clinical decision-making, personalize treatment plans, and deliver predictive insights that can improve patient care. Hospitals across Saudi Arabia are increasingly incorporating machine learning to optimize operations and enhance health outcomes.
According to a report by GlobalData, AI-powered monitoring systems are now in use in many healthcare facilities across the Kingdom. These systems utilize real-time analytics and sensor technologies to boost patient safety and alleviate staffing pressures—offering a glimpse into how smart technology is reshaping the day-to-day realities of clinical care.
“Most responsible AI-powered telemedicine solutions are developed as clinically assistive tools,” said Hannah Gibson, director of UK and global partners at Visiba. “Triage in-person consultations may not always be necessary and if they are, should be more efficient.”
Still, the development of benchmarking tools to evaluate AI systems remains limited. “It takes a significant amount of time and resources for companies to create reliable benchmarking tests for research and development purposes,” said James Tapscott, senior manager of innovation and legal technology at Addleshaw Goddard.
He referenced findings from a report by Addleshaw Goddard, which showed that specific AI-powered retrieval techniques boosted the accuracy of commercial contract reviews from 74 percent to an average of 95 percent. Highlighting broader applications of artificial intelligence, he noted that in certain scenarios, AI models can deliver more concise responses than human counterparts—without compromising on accuracy.
“When it comes to telemedicine, it may be that a more concise, easily understandable answer is preferred … it may be surprising to your readers to see how well these models perform compared to humans,” Tapscott added. Kellie Blyth, partner in commercial at Addleshaw Goddard, said image analysis is one of the most common applications. “The most prevalent use of AI we are seeing in the market is to analyze medical images such as X-rays, MRIs, and CT scans. Many of these solutions can detect anomalies and diseases with an extraordinarily high degree of accuracy, often at earlier stages than previously thought possible.”
Kharbanda said AI could help improve efficiency in outpatient consultations by at least 20 percent, while also easing bottlenecks in emergency and surgical departments.
Investment trends
Saudi Arabia’s digital health sector is experiencing rapid expansion, driven by both public and private investments. A study by BlueWeave Consulting estimated the country’s digital health market size at $3.2 billion in 2024, with projections indicating a compound annual growth rate of 21.3 percent through 2031, reaching $13.3 billion.
Kharbanda said there is a shift in investment focus toward “AI-driven diagnostics, augmented care delivery, and supporting the provider-payer system in understanding health risks and funding structures to optimize health outcomes.”
The most prevalent use of AI we are seeing in the market is to analyze medical images such as X-rays, MRIs, and CT scans. Many of these solutions can detect anomalies and diseases with an extraordinarily high degree of accuracy, often at earlier stages than previously thought possible.
Kellie Blyth, partner in commercial at Addleshaw Goddard, said image analysis is one of the most common applications
Tapscott noted that semi-autonomous AI, also known as agentic AI, could become more common in lower-risk areas such as elder care, offering adaptive solutions that help reduce costs and increase efficiency.
Blyth pointed to the need for regulatory clarity, particularly around ethical use. She said frameworks should address “algorithm vigilance,” which involves regular monitoring to minimize bias and ensure safe use in clinical settings.
Looking ahead
Saudi Arabia’s digital health strategy continues to evolve, with future developments likely to include greater use of wearables, predictive modeling, and AI-assisted diagnostics.
Blyth said a major step forward will be the national biobank overseen by the King Abdullah International Medical Research Center. “The real advances in telemedicine will come at the state level with the establishment of the national biobank,” she said, which will serve as a valuable resource of clinical data from the Saudi population.
This will be further supported by computing infrastructure investments made through the Saudi Company for AI.
Gibson said triage systems powered by AI could soon become a regular feature across healthcare facilities, helping to direct patients to the appropriate level of care from the beginning.
As adoption grows, Saudi Arabia is developing a healthcare model that blends digital access with AI-backed insights, aimed at improving outcomes and supporting a more resilient health system.
MENA startup funding drops 76% in March
- Decline reflects broader economic uncertainty stemming from ongoing US trade tensions
RIYADH: Startup investment in the Middle East and North Africa region fell sharply in March, with total funding declining 76 percent month on month to $127.5 million across 28 deals, down from $530 million in February.
The decline — observed even after excluding debt financing from both months — reflects broader economic uncertainty stemming from ongoing US trade tensions with global partners.
These geopolitical developments have impacted key regional economies, contributing to a 50 percent year-on-year drop in both the volume and value of investments, according to Wamda’s monthly report.
February’s funding surge was largely driven by major startup events, including Saudi Arabia’s flagship LEAP conference.
UAE tops regional funding
The UAE retained its lead in regional startup funding, securing $104.4 million across 14 transactions. Egypt ranked second with $11.6 million from four deals, followed by Saudi Arabia, which raised $8 million through five startups.
Despite the March slowdown, the first quarter saw robust activity, with MENA startups raising $1.5 billion — marking a 244 percent increase compared to the same period in 2024.
Fintech leads Q1 surge, SaaS absent for 2nd month
Fintech remained the dominant sector, attracting $82.5 million across 10 deals in March alone. The sector accounted for over $1 billion in the first quarter funding across 36 startups, cementing its role as a top investment magnet since 2021.
Healthtech and artificial intelligence followed, raising $16 million and $14 million respectively. In contrast, software-as-a-service, or SaaS, startups failed to secure funding for the second consecutive month.
Early-stage companies captured 70 percent of March funding, amounting to $58 million, while later-stage firms raised $46 million, including three Series B rounds.
Debt financing also declined sharply, comprising just 12.5 percent of total monthly funding. Business-to-business startups continued to attract the bulk of investor attention, raising $97 million, while business-to-consumer ventures brought in $24 million.
Gender funding gap widens; investor caution rises
No female-founded startups received funding in March — a significant setback for gender equity in the region’s entrepreneurial landscape.
Male-founded ventures secured $113 million, with the remainder going to mixed-gender founding teams.
The broader investment slowdown is expected to prompt increased investor caution, with a tilt toward later-stage startups that have demonstrated resilience amid macroeconomic headwinds, Wamda noted.
Sectors tied to global trade — such as logistics, mobility, and e-commerce — may face continued challenges as new alliances and shifting energy dynamics reshape the global economic order. However, adaptable startups could benefit from emerging opportunities, the report added.
Sadq raises $1.5m to expand digital signature platform
Saudi Arabia-based Sadq, a digital signature and document authentication platform, has raised $1.5 million in a pre-Series A round led by X by Unifonic Fund. Other investors, including strategic backer Unifonic, also participated.
Founded in 2022 by Abdullah Al-Lahuo and Salem Al-Badawi, Sadq offers legally compliant digital solutions for secure document management and plans to use the funding to expand its presence across Saudi institutions.
TruBuild secures $1m to fuel AI-powered contech expansion
Saudi construction tech startup TruBuild has raised $1 million in a seed round led by Wa’ed Ventures and Dar Ventures, with support from Plug & Play Ventures, OQAL, Taz Investment, and several angel investors.
Founded in 2023 by Bisrat Degefa and Sari Sabban, TruBuild uses AI to reduce inefficiencies and improve collaboration in construction projects. The funding will support product development and expansion within and beyond Saudi Arabia.
Seesaw acquires Little Thinking Minds
US-based edtech company Seesaw has acquired Jordan’s Little Thinking Minds for an undisclosed sum.
Founded in 2004 by Lamia Tabbaa and Rama Kayyali, Little Thinking Minds specializes in Arabic literacy tools and is one of the region’s prominent female-founded edtech startups.
Seesaw, established in 2007, develops AI-powered learning tools and digital curricula. The acquisition will integrate Seesaw’s interactive tech with Little Thinking Minds’ Arabic language expertise.
Dubizzle Group acquires Property Monitor
Dubai-based classifieds platform Dubizzle Group has acquired UAE’s Property Monitor, a real estate analytics firm, for an undisclosed amount.
Founded in 2014, Property Monitor provides valuation and market intelligence services for real estate stakeholders. The acquisition supports Dubizzle’s strategy to expand offerings across its platforms Bayut and dubizzle. It follows Dubizzle’s February acquisition of Egypt’s online car marketplace Hatla2ee.
DPI takes over Egypt’s Nclude fintech fund management
UK-based private equity firm Development Partners International has assumed management of Egypt’s fintech fund Nclude, previously overseen by Global Ventures.
Launched in 2022, Nclude closed a $110 million round that September and has invested $28 million across nine startups, including Partment, Khazna, and Paymob.
DPI will advise through a dedicated Egypt-based team. With nearly $850 million invested in Egypt over the past decade, the firm brings significant experience in supporting digital transformation.
AIREV receives strategic backing from Venturewave Capital
UAE-based artificial intelligence firm AIREV has secured investment from Ireland’s Venturewave Capital to accelerate the growth of its AI operating system ‘On-Demand.’
The capital will enable AIREV to expand beyond the UAE and Ireland and explore new markets. The investment reinforces its ambition to scale as a leading AI player in the Gulf.
The investment reinforces AIREV’s position to scale as an AI company in the Gulf region.
viAct raises $7.3m Series A to advance industrial AI
Hong Kong-based AI startup viAct has closed a $7.3 million Series A round led by Venturewave Capital, with participation from Singtel Innov8, Korea Investment Partners, and the PolyU Entrepreneurship Investment Fund.
The firm develops AI models for hazard prediction and workforce safety in high-risk sectors. viAct plans to expand its presence in the Middle East, especially Saudi Arabia, and grow its engineering and sustainability teams globally.
UK-Saudi trade ties deepen as 50 British firms set up regional HQs in Kingdom
RIYADH: The strong investment growth in Saudi Arabia’s economy has led 50 British companies to set up regional headquarters, joining over 1,300 UK firms already operating in the Kingdom, said a senior UK trade official.
The UK is positioning itself as a long-term partner in the Kingdom’s economic transformation, with bilateral trade already surpassing £17 billion ($22.55 billion) and expected to grow further in line with Vision 2030.
“The UK and the Kingdom of Saudi Arabia have enjoyed a warm and deep trading relationship for a long time,” said Peter Ashby, deputy UK trade commissioner for the Middle East, in an interview with Al-Eqtisadiah.
“So, we are starting from strong foundation and a place of friendship and mutual respect,” added Ashby, who is also the director of trade and investment at the British Embassy in Riyadh.
Both governments, he said, “are working extremely hard to strengthen our trading relationships and to create quality jobs in new sectors under Vision 2030 and the UK’s upcoming Industrial Strategy.”
Ashby said the UK-Saudi Strategic Partnership Council — led by Saudi Commerce Mnister Majid bin Abdullah Al-Kassabi and UK Secretary of State for Business and Trade Jonathan Reynolds — has been central to advancing bilateral initiatives across economic and social pillars.
‘Great Futures’ initiative
A flagship effort under that framework is the ‘Great Futures’ campaign, which Ashby described as a “joint initiative to promote trade, tourism, innovation and cultural partnerships.” It has supported deals in priority sectors such as critical minerals and AI-enabled technology.
“The campaign continues, with GREAT FUTURES supporting business engagement in the UK and Saudi Arabia, including bespoke events such as the UK-Saudi Skills Forum at the upcoming HCI (Human Capability Initiative) and EDGEx Education Global Exhibition,” Ashby said.
The campaign’s impact was tangible from the outset. “The event delivered more than 50 agreements across priority sectors and was the catalyst for the partnerships worth over £7.7bn and delivering 4000 jobs in both Kingdoms, announced during the UK Prime Minister’s visit in December last year,” he said.
One of those deals involved hydrogen-focused UK firm HYCAP, which partnered with Saudi companies “to invest over £750 million in hydrogen mobility infrastructure solutions between both our countries, securing over 1000 jobs across Northern Ireland and the rest of the UK.”
Vision 2030 alignment
Ashby pointed out that the UK is “strategically aligning its expertise with Saudi Arabia's Vision 2030 priorities, particularly focusing on supporting the Kingdom's transition into non-oil sectors.”
The UK is concentrating on industries where it already leads globally — “including energy, financial services, clean technology, advanced manufacturing, digital innovation, healthcare, biotech, creative industries, and defence.”
Recent milestones include the announcement of a UK-Saudi Sustainable Infrastructure Assembly, aimed at enhancing collaboration between UK financial and professional services and Vision 2030’s sustainable infrastructure projects.
He also cited the example of UK-based Phytome Life Sciences, which launched “a UK-Saudi innovation-investment bridge with the Research, Development and Innovation Authority (RDIA), to accelerate research, development and investment in medicines, materials and agricultural solutions.”
Academic collaboration is another key focus. “Our UK universities have already been working in this space, with one notable example being the partnership in AI for precision medicines between the University of Oxford and King Abdulaziz University, and we hope to see more partnerships thrive,” he added.
“With more than 1300 UK firms operating in Saudi Arabia and more than 50 UK companies establishing regional headquarters in the Kingdom,” Ashby said, “the export of UK skills and expertise to the country puts the UK in a strong position to support the transformation that is taking place through Vision 2030.”
Supporting giga-projects
UK firms are also playing a growing role in the Kingdom’s giga-projects, including NEOM and the Red Sea Project. “UK firms are making substantial contributions to Saudi Arabia's giga-projects, bringing world-leading expertise in innovation, sustainability, and technical excellence,” he said.
He cited Graphene Innovations, a Manchester-based firm that “recently announced the world’s first commercial production plant for graphene-enriched carbon fibre with NEOM.” The facility is expected to “generate £250 million of investment into a research and innovation hub in Greater Manchester and is expected to create more than 1,000 skilled jobs in the region.”
On the Saudi side, the project is expected to “contribute over 4,500 skilled jobs to Saudi Arabia’s economy by 2030, generating revenues exceeding $1.6 billion.”
Ashby said these partnerships showcase “the UK's strengths in clean technology, advanced materials, and sustainable infrastructure — all critical components of Saudi Arabia's ambitious giga-projects as they move from strategy into delivery phase.”
Clean energy, smart Infrastructure and capital markets
Clean energy partnerships between the UK and Saudi Arabia are valued at £7.7 billion and are “set to create over 4000 UK jobs,” Ashby noted.
Among them is Carbon Clean’s work with Aramco on modular carbon capture, and Next Generation SCM’s deal with City Cement Co. to produce 2.5 million tonnes of sustainable cement and concrete materials annually.
On financial services, Ashby emphasized the UK’s global role: “All Saudi Arabian bond and sukuk issuances have been made through The London Stock Exchange (LSE), with $41.8 billion in capital raised in 2024 alone. This demonstrates the deep trust Saudi institutions place in UK financial markets.”
By leveraging this expertise, UK firms are “supporting the development of more sophisticated capital markets, and facilitating Saudi companies' access to global investment.”
UK-GCC FTA
Looking ahead, Ashby underscored the strategic significance of a UK-Gulf Cooperation Council Free Trade Agreement. “This could grow trade between the UK and the GCC by 16 percent, adding an extra £8.6 billion a year to trade. Of course, this would further help to grow the UK-Saudi trade relationship.”
He acknowledged that one of the main challenges isn’t regulation, but perception. “In fact, many UK companies are surprised by how straightforward it is to do business in Saudi Arabia — so I would say that making sure that business leaders fully understand the market is probably the biggest challenge,” he said.
“Many business leaders talk of understanding the Gulf, but the countries within the region are very different. Saudi Arabia is a unique country, with extraordinary, hard-working, and innovative leaders in business and government.”
His advice to executives: “I would encourage all leaders with a serious interest in partnering in the Kingdom to come and build relationships directly here.”
Future opportunities
Ashby said the UK’s upcoming Industrial Strategy “emphasises the importance of shaping markets to meet rapid global economic changes ensuring that the UK remains at the forefront of innovation and investment opportunities.”
He identified growth sectors aligned with Saudi Arabia’s trajectory: “Advanced manufacturing, especially involving innovative materials like graphene-enriched carbon fibre, offers substantial growth potential. The creative industries, digital technology, healthcare, and biotech sectors also present significant opportunities.”
On tourism and entertainment, he added: “Saudi Arabia's focus on developing tourism and entertainment infrastructure creates openings for UK firms with experience in these sectors.”
“As Saudi Arabia continues its impressive delivery of Vision 2030, I see great potential and opportunities for UK and Saudi businesses to contribute to the growth and prosperity of each other’s economies.”
Saudi Arabia poised to become Mideast’s Silicon Valley, say experts
RIYADH: Saudi Arabia is rapidly transforming into a regional technology hub, drawing comparisons to Silicon Valley, thanks to a wave of strategic investments and high-profile initiatives, experts have told Arab News.
At the heart of this transformation is Project Transcendence, a groundbreaking $100 billion initiative launched in 2024.
Spearheaded by the Kingdom’s Public Investment Fund in partnership with Google, the project aims to build a comprehensive artificial intelligence ecosystem within Saudi Arabia.
The initiative is set to bolster the growth of local tech startups, generate employment opportunities, and foster collaborations with global technology firms — positioning the Kingdom at the forefront of regional innovation.
Complementing these efforts is the annual LEAP technology conference, which continues to gain international attention. The 2025 edition of the event attracted over 170,000 visitors and secured investments exceeding $14.9 billion, underscoring Saudi Arabia’s growing appeal as a technology and innovation destination.
These developments are central to the Kingdom’s broader economic reform strategy under Vision 2030, which aims to diversify the economy and reduce its longstanding reliance on oil revenues.
With strategic initiatives and strong global partnerships, Saudi Arabia is cementing its place as a key player in the global tech landscape.
Speaking to Arab News, Noor Al-Nahhas, co-founder and CEO of UAE-based software company nybl, said: “Saudi Arabia is rapidly transforming into a global technology hub, driven by Vision 2030’s ambitious agenda. The Kingdom is creating a robust ecosystem for tech startups to thrive while accelerating investments in AI and deep tech — technologies that are critical to furthering the progress of the sector.”
He added: “With the emerging developments we are seeing in the Kingdom, obstacles are few — this is the Silicon Valley of the Middle East and a rising force in the global tech landscape.”
Mamdouh Al-Doubayan, managing director of Globant for the Middle East and North Africa region, also echoed similar views. He said that Saudi Arabia’s investments in the digital infrastructure should be supported with key partnerships to achieve the desired results.
“The Kingdom is making substantial investments in digital infrastructure while fostering an ecosystem that nurtures innovation and entrepreneurship. Key partnerships are pivotal to driving this vision forward,” said Al-Doubayan.
The crucial SME factor
Vikas Panchal, general manager, Middle East, for Indian multinational technology company Tally Solutions, told Arab News that small and medium enterprises in Saudi Arabia have a huge role to play as the Kingdom continues its technological evolution journey.
“Saudi Arabia is rapidly advancing in its digital transformation journey, with SMEs playing a pivotal role in this evolution. The Kingdom’s Vision 2030 has placed technology and digitalization at the forefront of economic diversification, fostering a pro-business environment where SMEs are seen to continuously succeed in,” said Panchal.
He added that government-backed programs like Monsha’at’s SME support initiatives as well as investments in AI, fintech and e-commerce are equipping businesses with scalable digital tools, thus allowing them to compete on a global scale.
“With streamlined business regulations and a growing interest in pursuing tech-driven efficiencies, Saudi Arabia is on track to becoming a global tech hub,” Panchal added.
Homegrown innovation
Amid these advancements, experts also highlighted potential challenges that Saudi Arabia may encounter as it strives to establish itself as a global tech destination.
Al-Doubayan noted that while the Kingdom is making significant progress in digital transformation, addressing certain challenges will be crucial to ensuring sustainable growth.
He pointed out that one of the key obstacles Saudi Arabia may face is building a robust talent pipeline to support the burgeoning tech sector.
“While the Kingdom invests in education and training, attracting and retaining skilled professionals in a competitive global landscape remains critical,” said Al-Doubayan, adding: “Additionally, navigating regulatory frameworks and ensuring a supportive environment for innovation can be complex, especially as the country seeks to balance rapid technological advancement with traditional practices.”
Panchal said that some of the challenges faced by the Kingdom include costs for digital transformation, especially among SMEs in the Kingdom.
“While large corporations are quickly embracing AI and automation, many SMEs still face challenges in transitioning from traditional to digital operations. The lack of expertise in adopting cloud-based financial management, tax automation, and real-time accounting can slow down their competitiveness,” said Panchal.
He added: “For some SMEs, the initial cost of transitioning to fully digital operations can be a challenging feat. By empowering SMEs with affordable, easy-to-use technology solutions, Saudi Arabia can overcome these hurdles and accelerate toward its goal of achieving a truly tech-driven economy.”
Al-Doubayan also expressed similar views and said that some companies are facing the risk of infrastructural limitations, as developing the necessary digital and physical infrastructure to support ambitious projects can be both time-consuming and costly.
Al-Nahhas said that Saudi Arabia should strengthen its AI capabilities to truly achieve its tech ambitions in the future.
“One critical factor to consider is the speed at which the global AI race is evolving. This will be a vital aspect to remain cognizant of as Saudi Arabia pushes forward in pursuit of meeting its Vision 2030 goals,” said the nybl CEO.
He added that Saudi Arabia should try to develop its local ecosystem for technological innovation rather than importing it from other nations.
“A striking example is DeepSeek, which in a short span has developed an AI model capable of rivalling those from Silicon Valley and disrupts the sector in unprecedented ways,” said Al-Nahhas.
DeepSeek, a chatbot developed by China, uses advanced large language models and was first launched on Jan. 10.
Upon its release, it quickly outpaced ChatGPT, becoming the most downloaded freeware app on the iOS App Store in the US.
The impressive performance of DeepSeek, coupled with its relatively low cost, has made waves globally, challenging the dominance of US-based AI models.
Thanks to its Natural Language Processing technologies, DeepSeek is able to understand, interpret, and generate human language more effectively, resulting in a 60 percent reduction in irrelevant search results compared to traditional search engines.
Al-Nahhas added: “This highlights the sheer speed of innovation in the tech sector, but also raises a fundamental question: ‘Why should we import tech when we have the resources and vision to create it in the Kingdom?’ To truly lead, Saudi Arabia must double down on homegrown innovation — over-reliance on external solutions risks dependency and could slow progress.”
During the recent LEAP conference, held in Riyadh from Feb. 9 to Feb. 12, Saudi Minister of Communications and Information Technology Abdullah Al-Swaha also talked about DeepSeek and said that it is beating all AI models.
“We have to celebrate the ChatGPT moment of 2022, but we also have to appreciate the DeepSeek moment. The world does not need polarization in the intelligent age. We need to work collectively to celebrate these advancements, where DeepSeek so far is beating all AI models,” the minister said.
Al-Nahhas added that Saudi Arabia has a massive opportunity to set global benchmarks by developing AI and deep tech in-house, and can ensure that technology is not just made for the Kingdom, but can be exported worldwide, contributing to the growth of the country’s economy.
“Competing on the global stage requires a mindset shift: Saudi Arabia is not just a consumer of technology, we are creators, driving the next wave of innovation from the Kingdom to the world,” said Al-Nahhas.
Dhruv Verma, founder and CEO of Thriwe, a tech-driven benefits as a platform company which expanded its presence to Saudi Arabia in 2023, said that stringent data protection laws may pose hurdles for foreign tech companies, making long-term private sector engagement vital for sustainable growth.
“As digitalization accelerates, the risk of cyber threats and data breaches increases, emphasizing the need for robust cybersecurity measures and cross-border collaborations,” said Verma.
Arun Bruce, CEO of Dubai-based management consultancy firm TransformationX, told Arab News that Saudi Arabia should strengthen its startup ecosystem to ensure that the technology sector will thrive long term.
He also echoed the views of Al-Nahhas that the Kingdom should avoid over-dependence on international technologies, and should develop advanced innovations locally.
“The tech startup scene in KSA is certainly strengthening — with multiple accelerators and government initiatives — but still has some way to go as it competes with global and regional startup hubs,” said Bruce.
He added: “As Saudi Arabia seeks to grow, localizing its tech inputs becomes important. Companies like PIF-backed ALAT are certainly taking the Kingdom in the right direction.”
