Halfway to SAR 1 Trillion: Digital Economy Sees Explosive Growth

Check out this recap for the most significant developments and corporate partnerships between US tech companies and Saudi counterparts.

The digital economy is on track to surpass SAR 1 trillion in market valuation. It currently stands as the largest in the region, with a market value of $131.9 billion (SAR495 billion), equivalent to 15% of national GDP.

This growth positions the Kingdom as a technological powerhouse shaped by increasing private sector participation and transformed by the rapid proliferation of digital applications across sectors.

Last week, in conjunction with the Saudi-US Investment Forum, several tech partnerships were announced. Below is a quick recap of the latest developments in the wider IT industry.

Related read: IT Consulting Sector in Saudi Arabia: AI, Telecom & IT Services

Saudi and U.S. Strengthen Partnerships in IT Sector

The Saudi-US investment forum in Riyadh catalyzed significant technological advancement for the Kingdom. Coinciding with President Trump's visit, Saudi Arabia secured deals with U.S. IT companies valued at over $300 billion.

Examples of partnerships include:

• SDAIA's partnership with PureStorage, DataDirect Network, Wika.io, and Palo Alto Networks to strengthen data infrastructure and cybersecurity capabilities.
• The Digital Government Authority's agreement with Oracle to enhance cloud computing services and improve digital government services for citizens and residents.
• The National Center for Privatization's cooperation with the Association for the Improvement of American Infrastructure to develop professional competencies in public-private partnerships.

Cisco Expands Saudi Footprint with New Initiative with HUMAIN

U.S. tech giants like Cisco are expanding their global footprint with a series of strategic initiatives. The global leader announced a groundbreaking initiative with HUMAIN—Saudi Arabia’s new AI enterprise, which aims to build world-class AI infrastructure that sets new standards for design, security, and delivery.

Cisco is making strategic investments across multiple fronts to strengthen the Saudi AI ecosystem. These include establishing an AI Institute at KAUST, providing digital upskilling for 500,000 learners over five years, and developing AI-driven infrastructure for Riyadh Expo 2030 and the 2034 FIFA World Cup.

Moreover, it is also working to launch fulfillment operations for wireless technologies, reflecting its commitment to the Kingdom's digital transformation journey.

HUMAIN and AWS Launch Kingdom’s First AI Zone

Alongside its partnership with Cisco, HUMAIN also partnered with AWS to launch the Kingdom's first AI Zone, backed by investments exceeding $5 billion. This initiative will leverage AWS's cutting-edge cloud infrastructure, including UltraCluster networks, Amazon Sagemaker, Bedrock, and Q service, to create a unified AI ecosystem for government and enterprise sectors.

The partnership builds upon AWS's existing $5.3 billion investment in a cloud region expected to launch in 2026. Beyond infrastructure, the collaboration focuses on workforce development, with AWS committing to train 100,000 Saudis in AI and cloud technologies.

This includes 10,000 Saudi women receiving free AWS certification thanks to their women-focused training initiative.

ICT Sector Hits $48 Billion in 2024

The ICT market has also risen meteorically, prompting myriad global companies to pursue an IT business setup in Saudi Arabia. Last year, it reached a market volume of SAR 180 billion ($48 billion), achieving a compound annual growth rate (CAGR) of 7.5% over the past five years.

Total broadband subscriptions have grown to 68.2 million, marking an annual rate of 7%. Within this context, the market capitalization of listed telecom and technology companies stood at $113 billion (SAR 427 billion).