No longer a financial reservoir? Saudi Arabia’s spending confirms clear shift in strategy
Riyadh, Saudi Arabia.
Xavierarnau | E+ | Getty Images
Saudi Arabia is moving full steam ahead with its focus on domestic investment — and with that, higher requirements for foreigners coming to the kingdom to take capital elsewhere.
The kingdom’s $925 billion sovereign wealth fund, the Public Investment Fund, saw its assets jump 29% to 2.87 trillion Saudi riyals ($765.2 billion) in 2023, its annual report published earlier this week revealed — and local investment was a major driver.
The fund’s investments in domestic infrastructure and real estate development grew 15% year-on-year to 233 billion riyals, while its foreign investments increased 14% to 586 billion riyals. At the same time, the Saudi government introduced laws and reforms to facilitate and even mandate investment in the country as it builds out its Vision 2030 plan to diversity its oil-reliant economy.
“The PIF’s report marks a shift from externally driven investments to a focus on domestic opportunities. The days of viewing Saudi Arabia as a mere financial reservoir are ending,” Tarik Solomon, chairman emeritus at the American Chamber of Commerce in Saudi Arabia, told CNBC.
“Today, success with the PIF hinges on partnerships grounded in mutual trust and long-term vision, where stakeholders are expected to contribute meaningfully with capital and not just seek profits.”
One example is the kingdom’s headquarters law, which went into effect on Jan. 1, 2024, and requires foreign companies operating in the Gulf to base their Middle Eastern HQ offices in Riyadh if they want contracts with the Saudi government.
Saudi Arabia’s recently-updated Investment Law seeks to attract more foreign investment as well — and it’s set itself a lofty goal of $100 billion in annual foreign direct investment by 2030.
Currently, that figure has averaged around $12 billion per year since Vision 2030 was announced in 2017, according to data from the kingdom’s investment ministry — still a long way from that goal.
Some observers in the region are skeptical as to whether the $100 billion figure is realistic.
“The new investment law is absolutely critical to facilitating more FDI, but it remains to be seen whether it will lead to the huge increase and quantum of capital required,” a financier based in the Gulf told CNBC, speaking anonymously due to professional restrictions.
Solomon echoed the sentiment, pointing out that higher spending on major projects will require higher breakeven oil prices for the Saudi budget.
“It remains to be seen whether the PIF’s domestic investments will deliver the anticipated returns, especially in a region full of instability and oil-dependent budgets facing prolonged periods of low oil prices,” he said.
Still, the new law will “improve local business conditions to attract investment from abroad,” James Swanston, Middle East and North Africa economist at Capital Economics, wrote in a recent report.
Investors have long complained that murky and often ad-hoc rules deterred greater involvement with the Saudi economy. The new law will make foreign investors’ rights and duties uniform with those of citizens, introduce a simplified registration process to replace license requirements, and ease the judicial process, among other things, according to the Saudi government.
“We’ve argued for a long time that so-called ‘wasta’ (loosely translated as ‘who you know’) has been a major deterrent to foreign companies establishing themselves in Saudi,” Swanston wrote.
Spurring greater foreign buy-in “should also ease the burden that has recently been placed on the Public Investment Fund to offset the weaker foreign investment into the Kingdom,” he added.
No more ‘dumb money’
The turn toward greater scrutiny and domestic priorities is not exactly new — rather, it’s picked up more speed each year.
While many overseas firms have long seen the Gulf as a source of “dumb money,” some local investment managers said — referring to the stereotype of oil-rich sheikhdoms throwing cash at whoever wants it — investment from the region has become much more sophisticated, employing deeper due diligence and being more selective than in past years.
“Before it was much easier to come and say, ‘I’m a fund manager from San Francisco, please give me a couple million’,” Marc Nassim, partner and managing director at Dubai-based investment bank Awad Capital, told CNBC in 2023.
“I think that a very small minority of them will be able to take money from the region — they are much more selective than before.”
If the kingdom’s priority was not clear to foreign investors before, it is now, the Gulf-based financier who declined to be named said.
“PIF has been focused on co-opting investment into Saudi for last several years,” he said. “It took a while for bankers to fully appreciate the scope and scale of the pivot. It’s rightly all about transforming the economy.”
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Trails of Iranian ballistic missiles light up the night sky as seen from Gaza City during renewed missile strikes launched by Iran in retaliation against Israel on June 15, 2025.
Anadolu | Anadolu | Getty Images
Tehran will “pay the price” for its fresh missile onslaught against Israel, the Jewish state’s defense minister warned Monday, as markets braced for a fourth day of ramped-up conflict between the regional powers.
Fire exchanges have continued since Israel’s Friday attack against Iran, with Iranian media reporting Tehran’s latest strikes hit Tel Aviv, Jerusalem and Haifa, home to a major refinery. CNBC has reached out to operator Bazan for comment on the state of operations at the Haifa plant, amid reports of damage to Israel’s energy infrastructure.
Iran’s Revolutionary Guard said overnight it deployed “innovative methods” that “disrupted the enemy’s multi-layered defense systems, to the point that the Zionist air defense systems engaged in targeting each other,” according to a statement obtained by NBC News.
Israel has widely depended on its highly efficient Iron Dome missile defense system to fend off attacks throughout regional conflicts — but even it can be overwhelmed if a large number of projectiles are fired.
The fresh hostilities are front-of-mind for investors, who have been weighing the odds of further escalation in the conflict and spillover into the broader oil-rich Middle East, amid concerns over crude supplies and the key shipping lane through the Strait of Hormuz connecting the Persian Gulf and the Gulf of Oman.
Oil prices retained the gains of recent days and at 09:19 a.m. London time, Ice Brent futures with August delivery were trading at $73.81 per barrel, down 0.57% from the previous trading session. The Nymex WTI contract with July expiry was at $72.7 per barrel, 0.38% lower.
Elsewhere, however, markets showed initial signs of shrugging off the latest hostilities early on Monday.
Spot prices for key safe-haven asset gold retreated early morning, down 0.42% to $3,417.83 per ounce after nearly notching a two-year-high earlier in the session, with U.S. gold futures also down 0.65% to $ 3,430.5
Tel Aviv share indices pointed higher, with the blue-chip TA-35 up 0.99% and the wider TA-125 up 1.33%.
European stock markets opened higher Monday, meanwhile, and U.S. stock futures were also in the green.
Luis Costa, global head of EM sovereign credit at Citigroup Global Markets, signaled the muted reaction could be, in part, attributed to hopes of a brisk resolution to the conflict.
“So markets are obviously, you know, bearing in mind all potential scenarios. There are obviously potentially very bad scenarios in this story,” he told CNBC’s “Europe Early Edition” on Monday. “But there is still a way out in terms of, you know, a faster resolution and bringing Iran to the table, or a short continuation here, of a very surgical and intense strike by the Israeli army.”
U.S. response in focus
As of Monday morning, Israel’s national emergency service Magen David Adom reported four dead and 87 injured following rocket strikes at four sites in “central Israel,” reporting collapsed buildings, fire and people trapped under debris.
Accusing Tehran of targeting civilians in Israel to prevent the Israel Defense Forces from “continuing the attack that is collapsing its capabilities,” Israeli Defense Minister Israel Katz, a close longtime ally of Prime Minister Benjamin Netanyahu, said in a Google-translated social media update that “the residents of Tehran will pay the price, and soon.”
The IDF on Sunday said it had in turn “completed a wide-scale wave of strikes on numerous weapon production sites belonging to the Quds Force, the IRGC and the Iranian military, in Tehran.”
CNBC could not independently verify developments on the ground.
The U.S.’ response is now in focus, given its close support and arms provision to Israel, the unexpected cancellation of Washington’s latest nuclear deal talks with Iran, and President Donald Trump’s historically hard-hitting stance against Tehran during his first term.
Trump, who has been pushing Iran for a deal over its nuclear program, has weighed in on the conflict, opposing an Israeli proposal to kill Iran’s supreme leader, Ayatollah Ali Khamenei, according to NBC News.
Discussions about the conflict are expected to take place during the ongoing meeting of the G7, encapsulating Canada, France, Germany, Italy, Japan, the U.K. and the U.S., along with the European Union.
— CNBC’s Katrina Bishop contributed to this report.
A Tesla Model 3 got stuck on a train track and was hit, albeit slightly, by a train in Sinking Spring, PA. The driver claimed it was in “self-driving mode.”
According to the fire alerts in Berks County, a Tesla Model 3 drove around a train track barrier near South Hull Street and Columbia Avenue and got stuck in the tracks.
The driver was able to exit the vehicle, but a train hit the car, reportedly snapping off the side mirror.
The fire commissioner ordered to stop all train traffic as the emergency services worked to get the Model 3 off the tracks using a crane.
Spitlers Garage & Towing, performed the recovery and shared a few pictures on Facebook:
The Tesla driver reportedly claimed that the vehicle was in “self-driving mode” leading up to getting stuck on the train tracks.
Tesla claims that all its vehicles built since 2016 will be capable of unsupervised self-driving with software updates; however, this has yet to occur.
Instead, Tesla has been selling a “Full Self-Driving” (FSD) package for up to $15,000 that requires the driver to constantly supervise the vehicle, with the driver remaining responsible for the car at all times.
Electrek’s Take
There have been instances of Tesla drivers engaging in reckless behavior and then attributing it to the Full Self-Driving (FSD) features.
I’m not saying it’s the case here, but it’s a possibility.
On the other side, I’ve seen FSD try to navigate around construction barriers. It’s possible that it tried to do that in this case, here and then got caught on the tracks.
We would need more data.
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