Saudi Arabia in prime position to become global leader in AI regulation, expert says

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The Saudi Authority for Data and Artificial Intelligence, which oversees and manages the development and use of AI in the Kingdom, has undergone amazing growth and is leading that mandate. (SPA)
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The Saudi Authority for Data and Artificial Intelligence, which oversees and manages the development and use of AI in the Kingdom, has undergone amazing growth and is leading that mandate. (SPA)
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Updated 04 February 2024
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Saudi Arabia in prime position to become global leader in AI regulation, expert says

  • Author and technology futurist Ian Khan says the Kingdom is doing a lot with AI in terms of setting the standards
  • ‘Jobs will transform into AI, which doesn’t mean people will lose their jobs but that the industries in Saudi Arabia will benefit from the creation and deployment of AI,’ he says

LONDON: Saudi Arabia is well placed to become a global leader in the regulation of artificial intelligence by initiating the discussions that will help craft a consensus on how such rules should operate, an expert on the emerging technology said.

Ian Khan, a technology futurist and author who writes on the subject of AI, told Arab News that the Kingdom is “doing a lot with AI” in terms of setting the standards, and is “in a position to take leadership and ownership of setting the framework for AI regulations at a global level.”

He added: “This is where AI regulations can start and this is where the discussion and dialogue for AI regulations can begin, because this is where AI is being implemented in everyday life.”

The Saudi Authority for Data and Artificial Intelligence, which oversees and manages the development and use of AI in the Kingdom, has undergone “amazing growth” and is “leading that mandate” in the country, he said.

In 2020, Khan predicted that AI technology will increasingly become a dominant force in the job market in Saudi Arabia, and said authorities in the Kingdom envision the nation becoming a global leader in AI.

“Jobs will transform into AI, which doesn’t mean people will lose their jobs, but that the industries in Saudi Arabia will benefit from the creation and deployment of AI,” he said.

“You look at (smart city projects in Saudi Arabia) like NEOM, which is so complex, or The Line, they are all driven by artificial intelligence, from managing transportation systems to managing homes.

“We need to have those (AI) regulations in place and at this moment in time, one of the countries from the Middle East will be the one that will start AI regulations.”

It might be Saudi Arabia that fills this role, or the UAE, or both of them working together, because the rules governing AI are beyond the scope of just a single government to decide, Khan added.

“But I think a collaborative force needs to emerge from the Middle East and I think (Saudi Arabia) is in a good position to do it,” he said. 

Khan, who is the CEO of Toronto-based technology-advisory firm Futuracy, said the US is lagging other countries in terms of implementation of AI, although the research and knowledge are available and being utilized by some of the biggest companies, but he predicted that “regulations-wise, it’s going to be a nightmare.”

He added: “There’s no regulation on AI, there’s no privacy control, there’s no intellectual property rights on AI, and there are many other issues.”

Still, Khan expects major growth in the use of AI, particularly in Saudi Arabia, where he said curiosity about how the technology will affect aspects of daily life has spiked in the past year.

For example, authorities in the Kingdom have announced plans to develop electric vehicles and the infrastructure for autonomous transportation, in other words, driverless vehicles that utilize AI technology, alongside wider plans to manufacture more than 300,000 cars a year in the country by 2030

Hyundai Motor Group and Lucid Motors have both signed agreements to build manufacturing plants in Saudi Arabia. Meanwhile, Ceer Motors, the first Saudi electric vehicle brand, was founded in 2022 and plans to begin sales in Middle Eastern markets by 2025.

Saudi Arabia is also “building the largest network of EV charging stations in the Middle East,” Khan said, and has established the Electric Vehicle Infrastructure Co. to promote the provision of fast-charging points in all regions of the Kingdom.

And in October 2023, Saudi developer Red Sea Global implemented the largest off-grid electric vehicle charging network in the Kingdom, a move seen as a significant stride toward sustainability.

“You are looking at AI technologies permeating the lives of everyday people, so we have to have regulations, guard rails, protections and safety mechanisms in place,” Khan said.

“Everybody’s loving the growth, and the attention that the (Saudi) leadership is giving to initiatives. There are organizations and sectors, such as energy and manufacturing, that are the stable ones that have been in the Kingdom for decades, and they are growing, but then they are now also investing in sustainability.

“They are looking at carbon footprints … and you’ve got initiatives that are not just about the youth but about growing talent, and that is happening through funding of different agencies.

“But it’s the convergence right now that you’re seeing, and the growth, in the tech sector. For example, King Abdullah University of Science and Technology or Aramco Ventures are really putting in a lot of investment in new, innovative technologies,” Khan continued.

You are looking at AI technologies permeating the lives of everyday people, so we have to have regulations, guard rails, protections and safety mechanisms in place.

Ian Khan, Technology Futurist and Author

“Saudi Arabia is looking to position itself not just as a G20 player, but probably one of the biggest players in the world when it comes to the economy being a financial hub. They’re also looking at climate change, looking to be leaders in oil and gas, but also alternative energy, and in the cultural fields, and the political field as negotiators between conflicting parties.”

Khan praised the Future Investment Initiative — a nonprofit organization launched in 2017 by the Saudi Public Investment Fund and dubbed the “Davos of the Desert” — for the “world-class and pure quality of content, ideas and thought leadership” that takes place at its annual forum, during which major global announcements are made each year.

In terms of developments in the Kingdom in the short term, Khan predicted that Saudi Arabia will have a regulatory framework for AI in place within one or two years, if not sooner.

Looking further ahead, he said: “By 2030, we are looking at some parts of these large infrastructure projects to actually be on stream and to be live and working, so you’re looking at AI being functional in those areas.

“By 2030, I am envisioning that the job market in Saudi will be driven by AI. In terms of AI, talent is needed. Data scientists are needed. People who can use AI in a better way are needed. People, leaders, engineers, doctors who are able to work with AI for their jobs are needed. So AI skills are going to be in demand.”

FASTFACT

Emerging Technologies

In 2020, Khan predicted that AI technology will increasingly become a dominant force in the job market in Saudi Arabia, and said authorities in the Kingdom envision the nation becoming a global leader in AI.

The pace of development of the technology will accelerate in general, he said, with applications in the fields of healthcare and curing diseases, child development, education, tourism, climate change, the food industry, transportation and manufacturing.

“Technology has been evolving at an exponential pace over the past 30 to 40 years, and now we are entering an era of the next machine age, or the fifth industrial revolution, where a lot of our world is going to be automated using artificial intelligence,” said Khan.

“By 2040, I believe that we will have mastered AI regulation, have frameworks and policies that protect people, have formalized and deployed global rules and laws that not just govern people in a country or a region, but globally.”

The majority of the world is increasingly going to be automated and there will be a tool for everything, he added, which will result in what he called “the integration of things,” whereby one or two systems will essentially control everything we use, so that use of numerous different applications is no longer required.

“By 2040 we will also see a lot more intuitive and experiential services that will be part of an AI-driven future, so that the quality of life of people will be much better than it is today,” he predicted.

 

FASTFACTS

In 2020, Khan predicted that AI technology will increasingly become a dominant force in the job market in Saudi Arabia, and said authorities in the Kingdom envision the nation becoming a global leader in AI.


Egypt’s non-oil business shrinks for 41st straight month, PMI shows

Updated 14 sec ago
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Egypt’s non-oil business shrinks for 41st straight month, PMI shows

CAIRO: Egypt’s non-oil private sector continued to shrink in April despite a $35 billion investment deal signed with the UAE in February and an $8 billion International Monetary Fund agreement in March, a survey showed on Wednesday.

The S&P Global Purchasing Managers’ Index for Egypt edged down to 47.4 in April from 47.6 in March, remaining below the 50.0 threshold that separates growth from contraction for a 41st consecutive month.

“Business activity once again fell markedly as firms commented on difficult market conditions, with the decline leading to a renewed drop in employment,” S&P Global said.

The employment sub-index slipped to 49.7 in April from 50.8 in March.

Egypt signed an agreement with the IMF on March 6, with an initial $820 million payout received in April and a second, $820 million payout expected after an IMF review in June.

In granting the financial support, the IMF cited shocks to the Egyptian economy from the crisis in neighboring Gaza. Egypt devalued its currency on March 6 and hiked interest rates by 600 basis points as part of the deal.

The output sub-index climbed to 44.8 in April from 44.5 in March and the new orders index improved to 45.5 from 45.0. Business sentiment also improved, with the future output expectations index climbing to 55.3 in April from 52.2 in March.

“Sentiment was at a six-month high, reflecting hopes of exchange rate stability, lower prices and better material availability,” S&P Global said.

Meanwhile, global ratings agency Fitch last week revised Egypt’s outlook to positive from stable.

The agency affirmed Eygpt’s rating at ‘B-,’ citing reduced external financing risks and stronger foreign direct investment.

Foreign investors have poured billions of dollars into Egyptian treasury bills since the country announced the IMF loan program. After the investment in the country’s foreign portfolio and the support from the UAE, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.

Fitch says that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.

The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter, its foreign debt climbed by $3.5 billion to $168.0 billion.

Meanwhile, Moody’s also revised its outlook on Egypt to “positive” in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.


Oil Updates – prices dip on rising US stockpiles, cautious supply expectations

Updated 48 sec ago
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Oil Updates – prices dip on rising US stockpiles, cautious supply expectations

NEW YORK: Oil prices fell in Asian trade on Wednesday as industry data showed a pile-up in crude and fuel inventories in the US, a sign of weak demand, and cautious supply expectations emerged ahead of an OPEC+ policy meeting next month, according to Reuters.

Brent crude oil futures fell 57 cents, or 0.69 percent, to $82.59 a barrel by 9:45 a.m. Saudi time. US West Texas Intermediate crude futures fell 53 cents, or 0.68 percent, to $77.85 a barrel.

Both benchmarks fell marginally in the previous session on signs of easing supply tightness and weaker global oil demand from an Energy Information Administration forecast report on Tuesday.

US crude stocks rose by 509,000 barrels in the week ended May 3, market sources said, citing American Petroleum Institute figures. Gasoline and distillate fuel inventories also rose, they said.

“API numbers released overnight were moderately bearish due to stock builds in both crude and products ... Concern over weaker-than-usual US gasoline demand and this stock-build have weighed on the prompt RBOB gasoline crack,” ING analysts said in a client note.

Official US government data on stockpiles is due at 5:30 p.m. Saudi time. Analysts polled by Reuters expect US crude oil inventories to have fallen by about 1.1 million barrels last week.

Cautious expectations on supply cuts from the Organization of the Petroleum Exporting Countries and its allies ahead of a June 1 policy meeting also weighed on markets.

“Oil prices have come under further pressure as noise around OPEC+ production policy grows,” the ING analysts said. “Expectations are that members will extend their additional voluntary supply cuts beyond the second quarter of this year.”

Meanwhile, hopes of a ceasefire in Gaza have also put pressure on oil prices in recent sessions, with some analysts saying the risk premium on oil declined in tandem.

“The fall in oil prices since Iran and Israel’s back-and-forth attacks suggests that some of the risk premium in prices has now unwound,” said economist Bill Weatherburn from Capital Economics in a client note.

“Prices continue to be supported by OPEC+ production cuts but we suspect that members will gradually unwind these cuts from July, pushing oil prices lower,” he added.

The US believes negotiations on a Gaza ceasefire should be able to close the gaps between Israel and Hamas. US Central Intelligence Agency Director Bill Burns will travel to Israel on Wednesday for talks with the Israeli Prime Minister Benjamin Netanyahu and other top officials, a source familiar with the matter told Reuters.

Some analyst expectations that short-term demand remains well-supported limited overall price declines.

“Much talk of economic run cuts in recent weeks is overblown in our opinion, with margins still healthy enough, which means rather that Asian demand could rather pick up once turnarounds peak and diminish,” said Sparta Commodities analyst Neil Crosby. 


Saudi Arabia transforms SWCC into water authority to boost security

Updated 44 min 38 sec ago
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Saudi Arabia transforms SWCC into water authority to boost security

RIYADH: Saudi Arabia’s efforts to bolster its water security received a significant boost with the restructuring of the Saline Water Conversion Corp. into the Saudi Water Authority.

This transition, which includes the adoption of new organizational frameworks, aims to enhance oversight of water-related activities, optimize regulations, improve service management, and foster methodological development.

The approval from the Saudi Cabinet, chaired by King Salman bin Abdulaziz Al Saud, will further bolster the sustainability of water resources and advance the objectives of the National Water Strategy, aligning closely with the goals outlined in Vision 2030. Under the new regulations, the SWA will be tasked with developing and refining policies, plans, programs, and initiatives pertaining to the water sector.

Additionally, it will establish the requisite standards and regulations for licensing within its jurisdiction. Moreover, the authority will work to unify technical and engineering standards across the water sector to ensure adherence to local content and sustainability standards.


Saudi bank loans up by 11% in March to hit $712bn

Updated 07 May 2024
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Saudi bank loans up by 11% in March to hit $712bn

  • Real estate financing for corporate dealings specifically surged by 27 percent

RIYADH: Saudi banks’ loans totaled SR2.67 trillion ($711.5 billion) in March, marking an 11 percent increase as compared to the same month in 2023, according to the latest official data.

Figures released by the Saudi Central Bank, also known as SAMA, showed personal borrowings accounted for 35 percent of this growth, while the remaining 65 percent went to the corporate sector, particularly for real estate activities, as well as electricity, gas, and water supplies.
Real estate financing for corporate dealings specifically surged by 27 percent in the third month of the 2024, marking the highest annual growth rate in 10 months, reaching SR275.2 billion.
A study by Mortor Intelligence, which used 2023 as a base year, estimated the Kingdom’s real estate market at $69.51 billion in 2024, and expects it to reach $101.62 billion by 2029, growing at a compounded annual growth rate of 8 percent between 2024 and 2029.
The surge in real estate and construction endeavors may have heightened the need for debt-based financing primarily sourced from the local banking sector. Saudi banks play a central role in the provision of loans for real estate projects.
According to SAMA data, new retail residential mortgage loans experienced a notable increase, reaching a 14-month high at SR7.63 billion in March. This marked a 5 percent rise compared to the amount granted in the same month last year and a 10 percent increase from the previous month.

HIGHLIGHTS

• New retail residential mortgage loans experienced a notable increase, reaching a 14-month high at SR7.63 billion in March.

• SAMA data also revealed that financing for professional, scientific, and technical activities soared by 54 percent, hitting SR6.4 billion.

In March, lending for home purchases accounted for the largest portion, comprising 64 percent of new mortgages to individuals, totaling SR4.91 billion. The most notable growth, however, was observed in apartment loans, surging by 28 percent to reach SR2.24 billion. Meanwhile, land loans experienced a more modest growth of 4 percent, reaching SR474 million in new mortgages.
One factor contributing to this growth could be the need for residential properties from expatriates arriving in the Kingdom, along with government initiatives aimed at modernizing the financial system.
In a March study by Knight Frank, a notable trend emerged among expatriates, with 68 percent expressing a strong preference for owning an apartment rather than a villa. This inclination was especially prominent among individuals aged 35-45 and 45-55.
Growth in lending for electricity, gas and water supplies came as the second contributor in corporate loans after real estate, registering an annual rise of 27 percent to reach SR147.42 billion in March.
According to an April report by Global Data, the key sectors in the Saudi Arabia power market are the residential sector, commercial sector, industrial sector, and others. In 2023, the residential sector had the dominant share in the power consumption market.
SAMA data also revealed that financing for professional, scientific, and technical activities soared by 54 percent, hitting SR6.4 billion, marking the highest annual growth rate among sectors.
Education loans also showed robust growth, with an annual increase of 28 percent to reach SR6.27 billion. Additionally, financing for administrative and support service activities rose by 20 percent, totaling around SR34.22 billion.


Budget deficit is ‘intentional’ to ensure sustainable development

Updated 07 May 2024
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Budget deficit is ‘intentional’ to ensure sustainable development

  • ‘As long as deficit is directed toward productive expenses, it is acceptable,’ says Al-Jadaan

RIYADH: Saudi Finance Minister Mohammed Al-Jadaan on Tuesday said the Kingdom is intentionally running a budget deficit to achieve its development goals.

The Finance Ministry announced the quarterly budget performance report on Sunday. As per the report, the Kingdom posted a deficit of SR12.4 billion ($3.3 billion) in Q1, marking the sixth consecutive quarterly deficit with revenues amounting to SR293.4 billion and expenditures hitting a record SR305.8 billion.

“We’re intentionally running a sustainable deficit for economic development, contrasting with mandatory borrowing in some nations for essential but unproductive expenses,” the minister told Al-Eqtisadiyah in an interview.

He said the deficit is not merely a consequence but an attempt to achieve development goals. The minister said the government prioritizes spending to accelerate the implementation of its development strategies and projects.

Al-Jadaan also shed light on the overall situation of the global economy and how Saudi Arabia’s prudent fiscal policies have supported growth and enhanced the Kingdom’s resilience in dealing with changes.

HIGHLIGHTS

Efforts are underway to attract domestic and foreign investments that stimulate economic growth and contribute to reducing the budget deficit.

Strategic spending has a multiplier effect on the economy, like creating jobs and enhancing trade through infrastructure investments.

Saudi Arabia is committed to optimizing government expenditures by directing them toward promising strategies.

Regarding the budget deficit and its potential impact on the economy, he reassured citizens that managing the budget deficit is a top priority.

The minister clarified that as long as the deficit is directed toward productive expenses, the government views it as acceptable, as it generates economic returns that exceed the cost of debt.

Highlighting sustainable financial policies, Al-Jadaan cited the government’s efforts to reduce its reliance on oil revenues by diversifying sources of income.

He said non-oil revenues made up 38 percent of the total income in 2023, compared to 9 percent in 2015. The minister said the ratio of non-oil revenues to covering expenditure ceilings was about 17 percent in 2015 and surged to reach 35 percent in 2023.

Al-Jadaan said: “Financial policies can enhance financial inclusion and access to funding, both vital for supporting entrepreneurship, small and medium-sized enterprises, and innovation. This contributes to achieving the goals of Saudi Vision 2030, which has succeeded in unprecedented achievements across various sectors.”

He also addressed the efficiency of government spending and its pivotal role in fostering economic development and bolstering economic resilience.

“We are committed to optimizing government expenditures by directing them toward promising strategies aimed at diversifying the economic base,” the official added.

He said by the end of 2023, total government spending had reached approximately SR1.29 trillion, reflecting continued progress in implementing initiatives and structural reforms.

These initiatives include regional and sectoral strategies supportive of structural transformation for comprehensive sectoral development and economic diversification, Al-Jadaan added.

Moreover, the finance minister revealed that active efforts are underway to attract both domestic and foreign investments that stimulate economic growth and contribute to reducing the budget deficit.

Commenting on the impact of strategic spending on the national economy, he said it “involves directing and allocating financial resources toward specific goals and priorities that align with long-term economic objectives.”

This is achieved by strategically guiding funds, enabling governments and institutions to stimulate economic growth and development, foster innovation, and enhance productivity, he explained.

The minister went on to say that for instance, investments in additional industrial zones, expanding ports’ capacities, and investing in roads have led to significant growth in industrial investments and logistics services, creating business opportunities and employment for many citizens.

“This supports economic activity and raises the non-oil gross domestic product, thereby increasing non-oil revenues and covering additional debt costs,” he added.

Al-Jadaan said that strategic spending has a multiplier effect on the economy, like creating jobs and enhancing trade through infrastructure investments.

The minister also highlighted Saudi Arabia’s remarkable international presence over the past seven years.

He emphasized that Saudi Vision 2030 has positioned the Kingdom as a preferred and leading destination worldwide.

Al-Jadaan explained: “The foreign direct investment as a percentage of GDP reached 2.4 percent, which stimulated economic growth and bolstered the Kingdom’s competitiveness in the global market, leading it to advance seven positions to become one of the top 20 countries in the Global Competitiveness Report for the year 2023.”

Additionally, Saudi Arabia participated in regional economic integration initiatives, strengthened close economic relations with neighboring countries, and capitalized on regional markets to achieve mutual benefits.

“The Ministry of Finance has undertaken the task of enhancing international cooperation in financial policies through fostering international economic and trade partnerships, exchanging expertise, and promoting development at both regional and global levels,” the minister said.

Al-Jadaan emphasized Saudi Arabia’s commitment to promoting international dialogue. “We take pride in the Kingdom’s strong relations with international organizations, believing in the importance of international cooperation to achieve development, enhance peace and international security, promote human rights, combat climate change, and foster economic collaboration.”

Saudi Arabia chaired the G20 meetings, the most important global economic forum, in 2020 and effectively managed global consensus on addressing the COVID-19 pandemic.

He emphasized that the Kingdom has presented initiatives that are still being implemented globally, including the Debt Service Suspension Initiative for the benefit of poor countries, further enhancing its international standing.

Moreover, Saudi Arabia won the bid to host the 2030 International Expo, further solidifying its international position. The Kingdom’s nominees also secured victories in several international organizations.

In terms of financial and monetary policy, Saudi Arabia’s recent successes and its active participation in local, regional, and international events led the IMF to choose the Kingdom to chair the International Monetary and Financial Committee.

“This reflects the close and long-standing relationship between the two sides, affirming the Kingdom’s commitment to actively participate in shaping and implementing international financial and economic policies,” Al-Jadaan added.

The minister highlighted the IMF’s Riyadh-based regional office and said: “The opening of the IMF’s regional office in Riyadh is a strategic move that reflects the Kingdom’s commitment to enhancing international cooperation and promoting economic stability at the regional level.”