PIF to release new strategy focused on private sector in ‘weeks’

• Governor ‘to encourage third-party capital’
• Fund ‘committed to its investments’ worldwide
• PIF dismisses suggestions of war jeopardy

The Saudi Public Investment Fund will unveil a new five-year strategy “in the coming few weeks”, its governor has said.

The plan, running from this year until the end of the decade, will put greater focus on attracting private-sector investment to PIF portfolio companies, Yasir al Rumayyan told an audience at FII Priority Miami on Thursday.

“We want to get more and more people to work with us,” he said, “to encourage third-party capital to work with us.”

The new approach would be a shift from the $1 trillion sovereign wealth fund’s previous philosophy of leading development projects with large, self-funded investments.

“We wanted to do most of these investments by ourselves and it’s all equity,” he said. “Now, we’re looking into it in a greater way: how to invite people to come and work with us.”

Since 2017, the fund has launched a number of multibillion-dollar giga-projects, including the futuristic city of Neom and the entertainment city Qiddiya.

“The initial thought was that we should do the whole thing ourselves,” al Rumayyan said, in specific reference to Red Sea Global, a tourism project on Saudi Arabia’s west coast.

“Maybe the initial work that we’ve accomplished [was the creation of the] foundations for others to come and work with us.”

The PIF hopes to attract investment also in key sectors including data centres, pharmaceuticals and renewables, al Rumayyan said.
Saudi Arabia’s artificial intelligence ambitions, which depend heavily on the development of new data centres, have been drawn into question since Iran began attacking its Gulf neighbours late last month. Tehran’s war with the US and Israel is likely to slow data centre developments and push international companies to reconsider their positions.

Strategic AI partnership

AI company Humain, a PIF subsidiary, nevertheless announced a new strategic partnership at the conference with Silicon Valley firm Turing to build an “enterprise-scale AI agent marketplace”, according to a release.

The product, the Humain One AI Agent Marketplace, will allow customers to “discover, deploy, and scale intelligent AI agents”.

Humain announced its Humain One computer operating system at FII’s flagship conference in Riyadh in October, when CEO Tareq Amin said the company was seeking a dual listing in Saudi Arabia and the US.

The latest announcement highlights the importance of US companies to the PIF’s ambitions. Speaking on stage, al Rumayyan pointed to Saudi Arabia’s achievement in attracting US tech companies such as Google, Oracle and Microsoft to work in the kingdom.

Further reading:

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• PIF shifting $12bn gaming portfolio to Savvy
• Saudi gaming company courts giants of Japan and South Korea

There has been speculation over the future of the Saudi-US relationship amid the war, which has seriously damaged Gulf economies.

The secretary-general of the GCC, Jassim Mohammed Al-Budaiwi, said on Thursday: “The GCC countries got surprised by the American-Israeli attacks on Iran and the GCC countries have said clearly that they will never take part in any military operation.”

The war has created some “frustration” among officials in Riyadh, according to Kristian Coates Ulrichsen, Middle East fellow at the Baker Institute.

“They felt that they made so many pledges of investment both into the US economy, but also into entities linked to family members of people linked to the White House,” he said. “They felt that their interests would be taken into account.”

The war began less than three months after Saudi Arabia upped its investment pledges in the US to $1 trillion. Now, Coates Ulrichsen said, there could be a re-evaluation of that relationship, depending on how long the conflict continues and where it leaves the Gulf.

“The US is important,” he said, not just in terms of Saudi Arabia’s security but also in areas such as AI investment, in which American companies are well positioned to support the kingdom.

Nevertheless, depending on the ultimate impact the war has on Saudi Arabia, “there may have to be decisions on how to redeploy capital to support the domestic, local economy”.

‘Long-term, patient investor’

Al Rumayyan said the PIF “remains committed to its investments around the world”, without giving specific details on its US plans. The fund says it has invested $170 billion in the US economy since 2017. 

The PIF is focused on long-term investments, al Rumayyan said, brushing away suggestions that the war would make its international deployments more difficult.

“We are a long-term, patient investor,” he said. “We measure our returns not in quarters but in decades.”

Cancellations of a number of Neom contracts have been announced in recent days.