Saudi Arabia positioning AI at the core of its economic diversification strategy
Artificial intelligence is no longer just a thematic
investment trend—it's transforming how venture capital firms operate globally.
From deal sourcing to due diligence, AI is reshaping workflows, improving
precision, and driving competitive edge.
Saudi Arabia is not only embracing this transformation but
actively leading it, positioning AI at the core of its Vision 2030 economic
diversification strategy.
“Saudi VCs are actually ahead of many regions in AI adoption
for deal sourcing and due diligence,” said Charles Kickham, Managing Director
of Cayenne Consulting, in an interview with Arab News.
“They’re using platforms like Affinity and Dealroom, which
incorporate AI for market intelligence and portfolio tracking,” he added.
AI adoption surging in VC firms worldwide
According to data from Gitnux:
- 42% of VC firms globally now use AI for deal sourcing
- 68% believe AI will significantly improve investment decision-making accuracy
- 75% of top-tier firms rely on proprietary deal-scanning tools
- 70% report measurable gains in operational efficiency
This AI wave is sweeping across VC firms of all sizes and
regions—from India to the Middle East—with firms deploying tools for sentiment
analysis, founder profiling, and portfolio tracking.
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Saudi Arabia’s strategic edge: Data, infrastructure, and policy alignment
Saudi Arabia’s advantage lies not just in adoption—but in institutional
scale and infrastructure. Kickham noted that sovereign funds in the Kingdom
have access to massive datasets that many Western firms lack, enabling early-stage
opportunity detection and improved scalability assessments.
“This kind of data access gives them a clear edge,” he said.
“They can identify patterns and ventures that smaller players simply can’t see
yet.”
Moreover, this transformation is policy-driven. AI in Saudi
Arabia is not just an operational upgrade—it's a strategic lever aligned with
Vision 2030.
“There’s a cultural factor at play here,” Kickham added.
“Saudi investors are focused on AI startups that reduce oil dependency. That’s
reflected in how deals are sourced and valued.”
The impact: Premium valuations. AI-driven fintech and logistics startups in Saudi Arabia are commanding 20–30% higher valuations than comparable startups elsewhere, according to Kickham.
Investor confidence and capital flow on the rise
A June 2025 report by MAGNiTT highlighted that AI was the
primary driver of investment activity across both private and public markets in
2024. The platform forecasts that AI funding in Saudi Arabia will double in
2025, fueled by investor enthusiasm for innovation.
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Arabia’s embrace of AI sparks technological advancement and economic growth
Saudi Arabia is already channeling capital into AI-native
funds and infrastructure. Talal Al-Jabri,
founder of the newly launched Wyld VC, pinpointed talent as the next key
unlock.
“The region’s
greatest gap is AI talent,” he said during Wyld VC’s AI fund launch in May.
“But the GCC is leading the AI revolution through massive infrastructure
investments and pro-innovation regulation.”
VCs around the globe automate to scale
In India, venture firms are also moving fast. Rahul
Agarwalla, managing partner at SenseAI, shared how AI has reshaped their
investment model.
“From deal sourcing
to diligence, AI gives us unprecedented scale and speed,” he told Entrepreneur.
“Our proprietary
engine identifies technical founders months before they raise, using signals
from research, product launches, and online activity.”
Globally, AI-based platforms now use natural language
processing, sentiment analysis, and signal graphs to assess everything from
market traction to founder behavior in real time.
Even mid-market firms without in-house data science teams
are using no-code AI tools to stay competitive.
“We’re seeing strong interest from firms in Asia and the
Middle East,” said Clyde Anderson, CEO of GrowthFactor.ai. “They want
AI-powered insights without needing deep technical expertise.”
Human judgment remains
vital
Despite the rise of automation, both investors and analysts emphasize that AI is a tool, not a replacement.
“AI can’t evaluate a founder’s resilience or long-term
vision,” said Agarwalla. “Those are deeply human signals. AI gives us leverage;
judgment gives us conviction.”
Kickham agreed, noting that while Saudi funds excel at
identifying opportunities, technical mentorship remains a challenge.
“That’s why we’re seeing more co-investment with
international funds,” he said. “Saudi investors are bridging the gap by
bringing in external expertise while building local capacity.”
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The Bottom Line: Policy + Capital + Tech = Strategic
Advantage
Saudi Arabia’s embrace of AI in venture capital isn’t just
following global trends—it’s integrating capital deployment with national
policy in a way few countries can replicate.
“They’re aligning investment, infrastructure, and regulation
around a single vision,” said Kickham. “That alignment gives them a long-term
edge.”
In a venture landscape increasingly driven by data,
automation, and global competition, Saudi Arabia’s AI-powered strategy may
define the next era of smart capital allocation.
Source: Arab News
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