The Development of the Technology Sector in Saudi Arabia: Opportunities for European Businesses

Home » The Development of the Technology Sector in Saudi Arabia: Opportunities for European Businesses

The Development of the Technology Sector in Saudi Arabia: Opportunities for European Businesses

Saudi Arabia’s Information and Communications Technology (ICT) market is the largest and fastest-growing in the Middle East and North Africa region. In 2024, Saudi Arabia’s ICT market was valued at approximately €41 billion, and 4% of the Kingdom’s GDP. It is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2025 to 2034, reaching an estimated €92 billion by the end of the forecast period. Positioned to become a leading technology services and cloud hub, the Kingdom is undergoing a profound transformation, establishing itself as a key centre for technological innovation. This evolution presents a wealth of opportunities for European enterprises looking to expand into new and dynamic markets.

The fourth edition of LEAP, the KSA’s flagship technology innovation event, took place in Riyadh from 9 to 12 February 2025, showcasing the Kingdom’s rapid advancements in the digital sector

LEAP 2025 – Saudi Arabia Strengthens Its Position as a Global AI and Technology Hub

The event brought together over 680 startups, more than 1,000 speakers, 1,800 global brands, and a total of 170,000 attendees. Among the key participants were leading international technology companies such as Salesforce, Google, Lenovo, and Alibaba Cloud, European leading companies in the sector such as Nokia, Orange, Ericsson, SAP and Schneider Electric, alongside major Saudi firms including Aramco, STC, and ALAT. There were also dedicated national pavilions showcasing European startups.

Saudi Arabia’s commitment to technological advancement is reflected in its strategic investments and collaborations with global industry leaders. During LEAP 2025, the Kingdom secured €14.14 billion in technological-related investments, reinforcing its ambition to position itself as a global hub.

Among the major announcements, Salesforce pledged €475 million to advance AI initiatives, including the deployment of its Hyperforce platform in partnership with Amazon Web Services. The company also plans to establish its regional headquarters in Riyadh and support 30,000 Saudi citizens with AI skills by 2030. Several other high-profile agreements were unveiled at the forum. American semiconductor company Groq secured €1.39 billion to develop the world’s largest AI inference centre in the country. ALAT, a subsidiary of the Saudi Public Investment Fund (PIF), concluded with Lenovo a €1.9 billion investment deal to establish an advanced R&D Center and a new manufacturing hub in Riyadh, to expand the Chinese tech giant’s presence in KSA. Other international firms also announced significant investments: Databricks pledged €286 million towards workforce training and local economic development.

Vision 2030: The Catalyst for Technological Advancement

Launched in 2016, Saudi Arabia’s Vision 2030 is a strategic roadmap designed to diversify the economy and reduce reliance on oil revenues. A key pillar of this vision is the digital economy, driven by continued investment in technology and innovation, positioning Saudi Arabia as a regional leader in digital transformation.

A core element of this transformation is the development of a strong technology sector, spanning information technology, artificial intelligence (AI), and digital infrastructure. The government’s commitment to fostering a knowledge-based economy has resulted in substantial investments in technological initiatives, creating an environment conducive to innovation and growth. Significant progress has been made in expanding digital infrastructure. Saudi Arabia currently hosts 22 operational colocation data centres, with 40 more under construction across the country. This rapid expansion underscores the Kingdom’s ambition to become a global hub for data and digital services.

Several government bodies play a crucial role in shaping and regulating the ICT landscape:

Ministry of Communications and Information Technology (MCIT): Responsible for setting policies and strategies governing the ICT sector.
Communications, Space, and Technology Commission (CST): Operating under MCIT, CST regulates Saudi Arabia’s ICT and space sectors.
Saudi Data and AI Authority (SDAIA): Oversees the national data and AI strategy, managing key sub-agencies:
- National Centre for Artificial Intelligence (NCAI)
- National Data Management Office (NDMO)
- National Information Center (NIC)
National Cybersecurity Authority (NCA): the NCA regulates and implements cybersecurity initiatives to safeguard national security, critical infrastructure, and high-priority sectors.

Through these strategic efforts, Saudi Arabia is rapidly emerging as an important player in the global digital economy, paving the way for sustained technological advancement and innovation. In December 2024, the 19th United Nations Internet Governance Forum (IGF) took place in Riyadh under the theme “Building Our Multistakeholder Digital Future”. Additionally, Kingdom joined, as third country in the world, the OECD’s AI Policy Observatory, aimed at monitoring and addressing AI-related challenges, with a specific regional focus across the Arabic-speaking world. This ambition was already expressed during the Global AI Summit held in Riyadh in September, where Abdullah Alghamdi, President of the Saudi Data and AI Authority (SDAIA), announced the launch of “Allam”, an open-access Arabic language model.

These initiatives underscore Saudi Arabia’s commitment to positioning itself as both a regional and international hub for technological innovation.

Government Initiatives and Support Mechanisms

To attract foreign investment and support business operations, Saudi Arabia has introduced a range of initiatives aimed at enhancing its business environment and cultivating a skilled workforce to meet the demands of the expanding tech sector.

Regulatory reforms have simplified licensing procedures, increased transparency, and introduced incentives, creating a more investor-friendly landscape. In parallel, educational programmes in universities are preparing local talent with the skills necessary to drive technological advancement.

Saudi Arabia also hosts several technology incubators to support startups and entrepreneurs, such as The Garage, the largest startup district in the Middle East, incubates international startups and offers specialised programmes. Over ten program cycles, The Garage has graduated more than 230 startups, supporting 450 founders from over 50 countries. Also, the KAUST (King Abdullah University of Science and Technology), is well known for supporting innovative entrepreneurs in the ICT sector.

Opportunities for European Companies

Saudi Arabia’s rapidly expanding technology sector offers numerous opportunities for European businesses to engage and invest across various domains. Key areas such as cybersecurity, the Internet of Things (IoT), and smart cities are promising. With the Kingdom’s ongoing smart city developments, including NEOM and the Red Sea project, there is increasing demand for innovative solutions in IoT, AI, and connectivity. Artificial intelligence and machine learning are integral to Saudi Arabia’s Vision 2030, with significant investments being made in AI applications within sectors like healthcare, finance, and education. This provides a significant opportunity for European companies with advanced AI capabilities to contribute to transformative projects. Furthermore, Saudi Arabia’s focus on green technologies and renewable energy offers openings for European firms specialising in sustainable solutions.

The European Chamber of Commerce in the Kingdom of Saudi Arabia (ECCKSA) plays a crucial role in fostering these opportunities by acting as a bridge between European expertise and the Kingdom’s ecosystem. To further explore these possibilities, the ECCKSA will host a roundtable on ICT and create a dedicated committee open to European, Saudi and international companies, providing a platform for constructive dialogue and potential collaboration.