Saudi Arabia’s Public Investment Fund (PIF) has urged the nation’s wealthiest families to invest more domestically as the government reassesses or cancels several major mega-projects. According to a report by Bloomberg on February 6, 2024, the PIF, along with the Ministry of Investment and other government entities, convened a meeting on the Red Sea coast with prominent families to discuss increased collaboration on local projects and partnerships with foreign investors.
The timing of this appeal coincides with significant delays and cutbacks in ambitious initiatives that were integral to Crown Prince Mohammed bin Salman‘s Vision 2030 strategy aimed at transforming Saudi Arabia’s economy. For example, reports indicate that construction of the Mukaab, a large cube-shaped structure planned for downtown Riyadh, has been suspended. Additionally, the ski resort Trojena, initially set to host the 2029 Asian Winter Games, is being downsized. The Financial Times has also noted that the Neom megacity project is undergoing major redesigns and reductions.
The shift in Saudi Arabia’s strategy signals a recalibration of its initial aspirations. Many economists and engineers had previously questioned the feasibility and potential returns of these grand projects. Experts suggest that the kingdom is now focusing on sectors where it possesses a competitive advantage, such as technology and renewable energy. For instance, Saudi Arabia has begun purchasing advanced AI chips from Nvidia and is constructing data centers from the Red Sea to key cities like Riyadh and Dammam.
With its abundant fossil fuel reserves, Saudi Arabia benefits from commercial electricity prices that are significantly lower—by 30 to 50 percent—than the global average. The country is also enhancing its mining and tourism sectors. In a move to attract foreign investment, new laws allowing foreigners to purchase property were introduced in January 2024. Under the leadership of Crown Prince Mohammed bin Salman, the government continues to push for economic diversification away from oil dependency. The non-oil sector now accounts for over 55 percent of the total real GDP.
Despite these efforts, the kingdom faces notable challenges. Oil revenue remains a critical funding source, contributing approximately 61 percent of the national income, according to the 2025 budget. With oil prices hovering around $60 per barrel, significantly lower than the $100 per barrel threshold deemed necessary for a balanced budget, the government has turned to international debt markets to fill funding gaps. In 2024, Saudi Arabia became the most active issuer of international debt in emerging markets, surpassing China. In January 2026 alone, the kingdom issued more than $20 billion in international bonds, reflecting strong demand for Saudi debt.
While the debt-to-GDP ratio remains low and the country enjoys a steady revenue stream from oil exports, signs of tightening liquidity have emerged. Crown Prince Mohammed bin Salman has encouraged state-owned banks to increase lending to private businesses and young home buyers. As banks navigate higher capital requirements, they have also begun to rely more on debt markets. This context suggests that the investment offices of wealthy families may be sought to bridge the funding gap created by state-owned banks.
The Bloomberg report does not indicate any current tensions between wealthy families and Saudi finance officials. However, the Crown Prince has previously leaned on these families for financial support. Notably, in 2017, during a high-profile corruption purge, many wealthy individuals were detained at the Ritz-Carlton in Riyadh and pressured to contribute substantial sums to the government. This included high-profile figures such as billionaire Alwaleed bin Talal.
As Saudi Arabia navigates these economic challenges, the focus on domestic investment and collaboration with affluent families appears crucial in sustaining the momentum of its economic transformation initiatives.
