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Saudi Arabia’s Public Investment Fund (PIF) will reduce the percentage of its international investments from 30% to around 18-20% of the $930 billion fund as the kingdom positions itself as a “super connector”.
Yasir Al Rumayyan, governor of PIF and chairman of Saudi Aramco and the FII Institute, speaking at the start of FII8 in Riyadh on Tuesday said there needs to be a global shift in focus from short term gains to sustainable growth supported by Artificial Intelligence (AI) that could benefit both economies and societies.
The head of the kingdom’s sovereign wealth fund added that in a world marred by uncertainty, countries which can bridge gaps between East and West are essential.
He said Saudi Arabia is a “super connector” thanks to its unique resources and strategic geographic location, which enables it to drive investments in infrastructure and technology.
The PIF, originally launched in 1971, before shifting in focus in 2015 under the control of Saudi Crown Prince Mohammed bin Salman, had $150 million in assets under management (AUM) nine years ago, with 2% invested internationally. That percentage grew to 30%, as AUM grew to $930 billion, Al Rumayyan said, but the target is to reduce that to 18-20%.
However, the dollar amount invested internationally will remain the same, as AUM continues to grow, he explained.
While the PIF has established in 92 companies, there has been a paradigm shift towards joint ventures, with the fund investing alongside existing companies, as the projects and companies created, including Saudi Arabian giga projects such as NEOM, become operational.
AI in focus
AI is a clear focus at the FII8 summit, with two AI avatars interjecting with comments during panel sessions.
During a board of changemakers alongside finance and tech heavyweights such as BlackRock CEO Larry Fink and Ruth Porat, President and CEO of Google, Al Rumayyan said the kingdom is “very well positioned” to be a global hub for AI for a number of reasons.
First, very efficient utilisation of energy and low cost of energy, second, massive lands and third, not only fossil fuels, but technologies that fuel energy.
Al Rumayyan told the conference that AI could add $20 trillion to the global economy by 2030 transforming industries and addressing critical challenges, adding that by the year 2027, AI growth will be a benchmark of national wealth.
Energy transition
Speaking about the challenge in energy transition, he said major players have invested $65 billion in low carbon technologies since 2017.
But, he added, there needs to be better alignment between government policies and fiscal strategies as without the right fiscal frameworks, even the most promising investments stall.
“Too often, deals don’t materialise simply because they don’t make economic sense under current policies. Here, we look to governments to bridge this gap, creating conditions that motivate and sustain investments.
“For the energy transition to succeed, for example, public and private sectors must move together, ensuring that policy and investment acts as catalysts.”
(Reporting by Imogen Lillywhite; editing by Bindu Rai)
