Mohamed Ramzy

The Middle East is undergoing a rapid digital transformation that has positioned artificial intelligence and data science as key drivers across the public and private sectors.

From enhancing decision-making and combating financial crimes to boosting efficiency in banking, insurance, healthcare, and digital government, AI solutions empower organizations to analyze big data and convert it into actionable, measurable decisions.

This dynamic created significant growth opportunities for specialized companies, especially those targeting regional markets such as Egypt, Saudi Arabia, and the UAE. In this context, DataScience Middle East emerged as a key player, delivering integrated AI and data science solutions.

Sharikat Mubasher held an interview with Sherif Elkhouly, Founder and CEO of DataScience Middle East, to discuss the company’s vision, its role in supporting digital transformation in Egypt and Saudi Arabia, and its ambitions to become one of the region's top AI solutions providers.

First, we would like to learn more about DataScience, and what distinguishes its services in AI and data science? 

DataScience was founded in 2014 with a headquarters in Dubai, and then expanded its footprint by opening a branch in Egypt in 2015 and another in Saudi Arabia in 2023.

The company delivers advanced solutions in AI, enterprise data management, cloud analytics, automation, and business intelligence. Additionally, it serves public and private enterprises, with a focus on banking and finance, alongside telecommunications, insurance, healthcare, and digital government.

This leading position made DataScience the trusted partner for over 100 large companies in the region, powering more than 200 successful projects across 12 countries, with a core emphasis on the Middle East and North Africa (MENA).

Egypt and Saudi Arabia are among the region's most vital markets. How do you assess digital transformation in both countries, and what are the common and different factors between the two markets?

Both markets are experiencing significant digital transformation, supported by different government entities in each country. In Egypt, for instance, there is tremendous momentum toward digital transformation, fueled by national mega projects such as the New Administrative Capital, which incorporates vast cloud spaces to accelerate innovation and transformation.

The private sector plays a pivotal role in Egypt, and strategic partnerships with global companies such as e&, Alibaba, and Huawei strengthen the country’s vision for transformation.

On the other hand, Saudi Arabia follows a clear strategy bolstered by huge investments in data centers and cloud environments, alongside unparalleled government support. We believe that the main common factor is the strong emphasis on AI and digital infrastructure. 

How do you see startups’ role in adopting AI, especially in Egypt?

Egypt is a pioneer in supporting small and medium-sized enterprises (SMEs) through the Social Fund for Development and the Micro, Small, and Medium Enterprises Development Agency (MSMEDA). Today, AI is used to maximize the impact of these programs, alongside a significant surge in entrepreneurship.

Recently, several conferences and events have been launched, bringing together thousands of startups and highlighting the immense growth in digital transformation across its various fields and objectives. In Egypt, nearly everything is now done through applications.

With the growing number of startups and entrepreneurial projects in Egypt and the flourishing of fintech and digital government services, I expect Egypt to become a hub for unicorn companies. We may see five to ten unicorns in the next five years, particularly in fintech and AI.

What is your vision for regional expansion, and what role does Saudi Arabia play in your strategic plan?

Our biggest ambition is to become a central hub for AI solutions in the Middle East, ranking among the top 10 companies specialized in this field.

We have a clear strategy in place through 2030 to expand our customer base, broaden our presence across the Arab world, and build large engineering teams by leveraging Egypt's strong competencies.

In Saudi Arabia, the company is keen to explore new opportunities given the government’s substantial support for digital transformation. We aim to implement our strategy there by attracting and training local Saudi talent. Once our 2030 strategy is completed, we will have further options for expansion and growth, including entering into partnerships with national or global entities within the Kingdom.

Could we witness the development of local Arab AI technologies as alternatives to global solutions?

Technologies are no longer confined to any single entity. The adoption of open-source models enabled the development of cutting-edge solutions and software anywhere in the world, including the Arab region.

Anyone, anywhere, can now develop technology and technical codes independently. Egyptian and Arab applications are gaining significant traction, and we are able to build tailored local solutions from the ground up. Relying on open-source technology enables us to innovate without the dominance of any country, which strengthens the region's potential to develop its own technology.

How do you address ethical and regulatory challenges related to deploying AI solutions, particularly in banking and government sectors?

At DataScience, we adhere to the highest security standards and strictly comply with local regulations in every country where we operate. We deliver flexible solutions that seamlessly adapt to government and regulatory frameworks, with a strong emphasis on data protection and transparency.

We continuously emphasize that the responsible use of AI is a cornerstone of our strategy, especially in critical areas such as financial crime prevention and risk management.

How do you see the impact of AI on Egyptian and Saudi economies in the coming years? 

AI will become a key driver of growth, enhancing efficiency, creating new job opportunities, and fostering innovation. In Egypt, given the momentum in startups and fintech, we expect tremendous growth. As for Saudi Arabia, with its massive investments, it is set to become a regional model. 

The region is witnessing accelerated growth in AI technologies, strengthening its potential to build a regional ecosystem capable of competing on a global scale.

DataScience is committed to supporting this transformation through advanced technology solutions that meet the needs of the Egyptian and Saudi markets.

Translation: Noha Gad

Kholoud Hussein 

Saudi Arabia is racing to position itself as a global hub for data centers—an ambition driven by its accelerating digital transformation, expanding cloud adoption, and the rapid deployment of artificial intelligence. As demand for data processing intensifies, a new challenge is emerging at the core of this growth: ensuring the stability and sustainability of the energy supply that powers these massive facilities.

In a country with some of the world’s highest solar irradiation levels, policymakers and industry leaders are shifting focus from generating solar power to storing it at scale. The consensus is growing stronger: the long-term future of Saudi Arabia’s data centers will depend on industrial-strength solar energy storage. Without it, the Kingdom’s data ambitions could outpace its ability to power them.

This feature explores why storage is becoming indispensable, how large-scale projects and national entities are responding, and the emerging role of startups in building a sustainable digital ecosystem.

Data Centers as the Backbone of Saudi Arabia’s Digital Economy

Data centers are central to the Kingdom’s digital transformation. According to the Ministry of Communications and Information Technology, the ICT sector contributed more than $40 billion to the Saudi economy in 2023, fueled by cloud computing, digital payments, e-government services, and widespread integration of AI technologies.

Global cloud providers have taken notice. Companies such as Oracle Cloud and Google Cloud are expanding their operations within the Kingdom, a move that reflects confidence in Saudi Arabia as a regional hub for digital infrastructure. Officials estimate that data center capacity will need to exceed 1,300 megawatts by 2030, nearly triple today’s levels.

As one senior government official put it, “We cannot build a digital economy without building energy-efficient, sustainable digital infrastructure. Data centers are at the heart of this evolution.” Achieving this vision, however, requires confronting the enormous energy demands of these facilities.

Why Solar Power Is Emerging as a Strategic Energy Source

Data centers consume electricity around the clock, making them among the most energy-intensive components of national infrastructure. Saudi Arabia’s push toward renewable energy—particularly solar—offers a natural solution. With a national target of generating 50% of electricity from renewables by 2030, solar power has become a pillar of the country’s energy transition.

Saudi Arabia enjoys some of the world’s most favorable solar conditions, with strong and consistent sunlight, a vast supply of land suitable for solar installations, and rapidly declining technology costs. Combined with government-backed initiatives and financing frameworks, the Kingdom has built a strong foundation for renewable energy deployment.

Even so, solar generation alone is not enough. While production surges during the day, data centers operate continuously. The mismatch between supply and demand creates a reliability gap—one that only large-scale, long-duration energy storage systems can bridge. As a Ministry of Energy official recently noted, “Renewables will power our digital future, but storage will stabilize it. Without storage, solar cannot meet the reliability standards required by data center operators.”

Energy Storage: The Missing Link in Saudi Arabia’s Digital Ambitions

Saudi Arabia’s solar infrastructure is expanding rapidly, but the industrial-scale battery systems required to deliver stable, uninterrupted power are still in early development. Energy storage plays a critical stabilizing role, ensuring that intermittent solar generation translates into reliable, continuous electricity—precisely what data centers require.

Storage systems ensure power reliability by covering hours when sunlight is unavailable or production dips unexpectedly, preventing costly interruptions. They also support grid stability as the energy mix becomes increasingly renewable, smoothing fluctuations and reducing stress on transmission infrastructure. Furthermore, stored solar energy lowers long-term operational costs by reducing reliance on peak-hour grid electricity and insulating data centers from market volatility. Sustainability targets are also easier to meet when facilities can rely on stored solar rather than fossil-based backup systems, a key requirement for global cloud operators.

Mega-Projects Setting the Standard for Renewable-Powered Data Centers

Saudi Arabia’s giga-projects—particularly NEOM and The Red Sea Project—are emerging as models for integrating solar power and energy storage at a scale capable of supporting data-intensive operations.

At NEOM, planners are building a fully renewable electricity network supported by advanced energy storage solutions. This design ensures that data centers within the mega-city operate around the clock using clean energy. A NEOM spokesperson explained that “our data centers will be powered 100% by renewable energy, supported by world-class storage solutions. This is the model we believe will scale across the Kingdom.”

The Red Sea Project offers another example. Although its focus is hospitality, it operates entirely on off-grid solar power supported by one of the world’s largest battery storage installations. This demonstrates that large-scale, mission-critical operations—whether resorts or data centers—can rely on stored solar energy without compromise.

Electricity Demand Is Surging: A Look at the Data

The Kingdom’s data consumption is rising sharply. Internet traffic is projected to triple by 2030 as cloud adoption grows, IoT applications multiply, and AI-driven solutions expand across public and private sectors. Globally, AI workloads are expected to increase data center electricity consumption by 400–600% over the next decade, and Saudi Arabia’s trajectory mirrors this trend.

As cloud providers establish local regions and as the country develops national AI models, electricity demand tied to data centers is strengthening. This makes renewable-powered data infrastructure not only a sustainability commitment but also a strategic economic requirement.

The Economics Behind Solar Power and Stored Energy

Energy already represents a substantial share of data center operating expenses—between 30% and 50% in most global markets. With Saudi Arabia vying to attract hyperscalers and global cloud operators, competitive and predictable electricity pricing is essential.

Solar power offers one of the world’s lowest-cost electricity sources, but energy storage significantly amplifies its economic value. Storage allows operators to arbitrage electricity consumption away from expensive peak hours, balance loads more efficiently, and reduce dependence on fossil-based generation. By enabling predictable, low-cost renewable power, storage strengthens Saudi Arabia’s appeal as a global data center destination.

A Riyadh-based financial analyst noted, “The economics of data centers will increasingly revolve around energy economics. Operators who tap into stored solar energy will have a strategic edge over those relying on traditional power.”

Government Policy and Long-Term Commitment

Saudi Arabia’s regulatory framework strongly supports renewable adoption and energy storage deployment. The Kingdom has rolled out ambitious solar projects through REPDO, encouraged private-sector participation in renewable generation, introduced green taxonomy and ESG guidelines, and established incentives that directly support battery storage implementation.

At the same time, cloud and ICT regulation has matured significantly, creating the level of certainty global operators need. Officials at the Ministry of Communications and Information Technology have been clear: data centers must prepare for a future where long-duration energy storage becomes a foundational requirement, not an optional enhancement.

Startups: An Emerging Force in Energy Optimization

Behind the large-scale infrastructure projects, Saudi startups are quietly playing a transformative role in energy innovation. A new wave of energy-tech companies is developing solutions that enhance the performance of solar systems, optimize storage, and reduce power consumption within data centers.

Saudi startups are building AI-powered battery management software, predictive energy consumption models, advanced cooling solutions tailored to the region’s climate, and platforms that optimize solar generation and storage capacity. These companies offer localized solutions that address the specific challenges of operating in extreme heat, high-demand cycles, and fluctuating load patterns—conditions common across Saudi data centers.

Venture capital interest in climate tech and energy innovation is rising, and startups in this sector are expected to attract increasing levels of investment over the next five years. As one technology advisor in Riyadh explained, “The next big wave of Saudi startups will be in energy optimization and storage. Data centers are a natural customer base for these companies.”

Addressing the Cooling Challenge

Another major energy challenge facing Saudi data centers is cooling. Cooling can account for nearly 40% of total energy consumption, and the Kingdom’s climate exacerbates the pressure on traditional cooling technologies. The growing need for efficient thermal management—especially as AI workloads increase—makes renewable-powered cooling systems more important than ever.

Innovators across Saudi Arabia are working on liquid cooling systems, immersion cooling, and AI-based thermal management tools. Others are designing solar-driven chiller technologies that leverage stored energy to maintain stable temperatures even during peak heat periods. These advancements will become essential as the size and complexity of data centers grow.

What the Next Five Years Will Look Like

Saudi Arabia’s data center sector is on the cusp of a dramatic transformation. Over the next five years, energy storage is set to become a standard component of data center infrastructure rather than a premium feature. New facilities will likely be co-developed with dedicated solar farms and integrated battery systems.

Meanwhile, startups offering energy-efficiency tools will gain prominence as operators seek localized, cost-effective technologies. Government policy will continue encouraging renewable-first designs, reinforcing investor confidence and accelerating foreign cloud investments. As AI adoption accelerates nationwide, demand for clean, reliable power will increase further, cementing the need for large-scale storage solutions.

Finally, Saudi Arabia’s aspiration to become a global data center hub is clear and achievable. But that ambition depends heavily on one factor: the Kingdom’s ability to build and scale solar energy storage systems that can support the continuous, power-hungry operations of modern data centers.

Solar energy is abundant. Technology demand is rising. The future hinges on the infrastructure that unites the two.

In the words of a senior policymaker, “Our data economy will grow as fast as our renewable infrastructure allows. Storage is the bridge between ambition and reality.”

Ghada Ismail

As artificial intelligence becomes a core layer of enterprise technology, attention is increasingly shifting to the infrastructure that powers it. Much of today’s AI innovation depends not just on algorithms, but on flexible platforms that can run applications seamlessly across data centers, cloud environments, and the edge. This is where companies like Red Hat play a pivotal role in building open-source, hybrid cloud technologies that provide a consistent foundation for modern IT.

With a portfolio that spans cloud platforms, automation tools, and application development solutions, Red Hat has positioned itself as a key enabler of enterprise transformation, helping organizations scale complex digital operations while maintaining flexibility and avoiding vendor lock-in.

In this interview, Mohamed Youssef, Head of Marketing for Central and Eastern Europe, the Middle East, and Africa at Red Hat, discusses how open-source innovation is accelerating AI adoption, the company’s growing focus on Saudi Arabia, and the sectors driving the Kingdom’s next wave of digital transformation.

To start, how is artificial intelligence transforming your company’s products and the solutions you deliver to customers?
Red Hat is a leading open-source software organization, and we provide multiple solutions that support infrastructure software for our customers.

When it comes to AI, the focus is on helping customers transform their core operations and become more efficient. One of the key solutions we provide is Red Hat OpenShift, which allows organizations to operate across multiple clouds with AI-enabled capabilities.

Through OpenShift, customers can build applications and AI solutions on top of our platform in a way that allows them to scale and operate much more efficiently. For example, they can manage workloads across multiple cloud environments, reduce errors, and create more flexible development environments before going live. In short, we help them operate faster and more efficiently.

What recent developments in AI are you most excited about?
We are working on several things, but one of the most important areas is helping customers build applications that are more stable and capable of scaling up depending on their needs.

With AI, organizations can scale their applications much faster and reach the market more quickly. This also helps them save resources and optimize costs. Ultimately, AI enables companies to accelerate development cycles while becoming more efficient in how they operate.

Many organizations today are investing in chatbots and conversational AI. How does Red Hat approach this space?
We do not compete directly in the chatbot space. What we provide instead is the foundation—the software infrastructure that chatbot solutions can run on.

In other words, developers and companies can build chatbot solutions on top of our platforms. We provide the underlying infrastructure that enables those applications to function effectively.

Saudi Arabia has become a key technology hub in the region. How important is the Saudi market for Red Hat?
Saudi Arabia is a strategic market for us. We have been operating in the Kingdom for many years, and we continue to increase our investments and resources there and across the wider region.

We work with most of the distributors and partners in Saudi Arabia and already have partnership agreements in place with them. It is definitely a core market for us, and we are investing heavily there. In fact, we moved to a larger office in the financial district in Riyadh two years ago in order to support our growing operations there.

In your view, which sectors in Saudi Arabia are currently the most prepared to benefit from AI transformation?
If we look at the Kingdom’s broader national agenda—particularly Saudi Vision 2030—it is clear that Saudi Arabia is accelerating investments in artificial intelligence across a wide range of sectors.

Rather than being concentrated in a single industry, AI adoption is happening at scale across the economy. The public sector and government entities are leading this shift, with significant investments in AI-driven initiatives, including projects linked to the Public Investment Fund’s HUMAIN.

The banking sector is also highly active, with financial institutions advancing AI-powered solutions through strategic partnerships with us. In the energy sector, Saudi Aramco is not only driving large-scale AI deployments but also stands as one of our key clients in the Saudi market.

We are also seeing strong momentum in aviation, particularly with Riyadh Air, which is among our clients, alongside growing adoption across entertainment, sports, and telecommunications. In telecom, stc is another example of a key client we work with to scale AI capabilities.

Overall, AI investment in Saudi Arabia is broad-based, with multiple sectors advancing in parallel—and notably, many of the leading players across these industries are part of our client ecosystem in the Kingdom.

Looking ahead, how do you expect AI to reshape the broader business landscape in Saudi Arabia?

AI is already transforming the way we work today, and the pace of development is extremely fast globally.

We are seeing this momentum in Saudi Arabia and across other markets in the Middle East. In Saudi Arabia specifically, there is a strong ambition to be ahead of the curve by building companies that are Saudi-developed and Saudi-originated.

There is significant investment supporting this effort. As a result, we will likely see rapid changes in the working environment and major improvements in efficiency as AI continues to transform how organizations operate and deliver services.

Kholoud Hussein 

Saudi Arabia’s venture capital landscape has undergone a profound transformation over the past five years. Once considered an emerging ecosystem, the Kingdom is now one of the most active startup investment markets in the Middle East and North Africa. Backed by structural reforms, sovereign capital, and an expanding pool of entrepreneurs, venture capital in Saudi Arabia is no longer defined by experimentation—it is increasingly shaped by strategic direction.

As the country advances its economic diversification agenda under Saudi Vision 2030, the question facing investors is not whether capital will continue to flow, but where it will be deployed next. The answer lies at the intersection of national priorities, technological transformation, and market demand.

A Market Moving from Volume to Strategy

Saudi Arabia recorded over $1.3 billion in venture capital funding in 2023, maintaining its position as the largest VC market in the MENA region. While deal volume remains strong, a noticeable shift is underway. Investors are becoming more selective, moving away from broad-based funding toward sector-focused, thesis-driven investments.

This transition reflects a maturing ecosystem. Early-stage enthusiasm—once concentrated in e-commerce and general fintech—is now giving way to more specialized sectors aligned with national transformation goals. Government-backed entities such as Public Investment Fund and initiatives like Fintech Saudi have played a central role in shaping this direction.

According to a senior official at the Ministry of Investment, “The next phase of venture capital in Saudi Arabia is not about increasing the number of startups—it is about building companies that can scale globally while solving real economic challenges.”

Artificial Intelligence: The Center of Gravity

Artificial intelligence is rapidly becoming the focal point of venture capital allocation in Saudi Arabia. The Kingdom’s ambition to become a global AI hub is reflected in both policy and funding priorities.

Estimates from Saudi Data and Artificial Intelligence Authority suggest AI could contribute $135 billion to the national economy by 2030, making it one of the most economically significant sectors in the country’s future.

Investment Momentum & Startup Activity

Saudi-based startups such as Mozn have already demonstrated the commercial viability of AI-driven solutions, particularly in fintech and risk analytics. Similarly, Quant Data & Analytics has expanded its footprint by providing advanced data solutions to both public and private sectors.

Over the next five years, venture capital is expected to increasingly target:

• Enterprise AI solutions
• Government technology (GovTech) platforms
• Arabic-language AI models
• Predictive analytics for industrial sectors

A senior executive at SDAIA noted: “Artificial intelligence will underpin every major sector in the Kingdom—from healthcare to logistics—creating a multi-layered investment opportunity.”

Fintech: From Expansion to Specialization

Fintech has been one of the most heavily funded sectors in Saudi Arabia, with the number of fintech companies exceeding 230 firms by 2024, compared to fewer than 50 just a few years earlier.

However, the sector is entering a new phase. Instead of horizontal growth, where multiple startups compete in payments and wallets, investors are now focusing on vertical specialization.

Next-Phase Investment Areas

• Wealth management platforms
• SME financing solutions
• Embedded finance
• Regulatory technology (RegTech)

Startups like Tamara and Tabby have already scaled regionally, demonstrating that Saudi-born fintech companies can achieve cross-border growth.

Officials at the Saudi Central Bank have emphasized that “the Kingdom is entering a phase where fintech innovation must go beyond payments and contribute to financial inclusion and economic productivity.”

Climate Tech and Energy Transition: A Rising Investment Theme

Saudi Arabia’s commitment to achieving net-zero emissions by 2060 is reshaping investment priorities. The energy transition is not only a policy objective but also a growing venture capital theme.

The Kingdom plans to invest tens of billions of dollars in renewable energy, including large-scale solar and wind projects, as well as green hydrogen production.

Opportunities for Startups

• Energy efficiency technologies
• Carbon tracking and ESG platforms
• Smart grid solutions
• Battery storage innovation

Projects under NEOM are expected to serve as testing grounds for many of these technologies, creating demand for startups that can provide scalable, tech-driven solutions.

An official from the Ministry of Energy stated: “The private sector, particularly startups, will play a crucial role in developing the technologies needed for the energy transition.”

Logistics and Mobility: Building a Regional Hub

Saudi Arabia’s ambition to become a global logistics hub is driving investment into mobility and supply chain technologies. The National Transport and Logistics Strategy aims to position the Kingdom as a central node connecting Asia, Europe, and Africa.

Investment Focus Areas

• Last-mile delivery optimization
• Autonomous mobility
• Fleet management platforms
• Smart warehousing systems

Startups such as Jeeny highlight the potential of mobility platforms to scale within the region, while new entrants are focusing on logistics efficiency and automation.

Over the next five years, venture capital is expected to increasingly back startups that can integrate AI into logistics operations, improving efficiency and reducing costs.

Digital Health: Scaling With Government Backing

Healthcare is another sector attracting increasing venture capital attention. With healthcare spending exceeding 189 billion SAR, digital health solutions are becoming a national priority.

Emerging Investment Areas

• Telemedicine platforms
• AI diagnostics
• Health data management systems
• Personalized medicine

The Ministry of Health has emphasized that “digital transformation in healthcare is essential to improving access, efficiency, and outcomes.”

The opportunity lies not just in building standalone applications, but in integrating digital health solutions into the broader healthcare infrastructure.

Tourism and Experience Economy: Technology Meets Culture

Saudi Arabia’s tourism sector is expanding rapidly, with the Kingdom surpassing 100 million visitors in 2023. As tourism becomes a key pillar of the economy, venture capital is increasingly directed toward startups that enhance the visitor experience.

Key Areas of Investment

• Travel-tech platforms
• Experience marketplaces
• AR/VR tourism solutions
• Event technology

Developments led by Red Sea Global and Qiddiya Investment Company are creating new demand for innovative digital solutions.

The Role of Sovereign and Institutional Capital

A defining feature of Saudi Arabia’s venture capital ecosystem is the role of sovereign and institutional investors. The Public Investment Fund continues to act as a catalyst, both directly and through its subsidiaries and partnerships.

In addition, government-backed funds such as Jada Fund of Funds have helped deepen the VC ecosystem by supporting local fund managers.

This institutional backing provides stability and long-term vision, allowing venture capital to align with national development goals rather than short-term market cycles.

Five-Year Outlook: Where Capital Will Flow Next

Looking ahead to the next five years, several trends are likely to define venture capital allocation in Saudi Arabia:

1. Sector Concentration

Capital will increasingly concentrate in fewer, high-impact sectors such as AI, climate tech, and digital health.

2. Larger Ticket Sizes

As startups mature, average deal sizes will increase, particularly in Series B and beyond.

3. Regional Expansion

Saudi startups will expand more aggressively into GCC and international markets, supported by stronger balance sheets.

4. Exit Maturity

The ecosystem will see more acquisitions and IPOs, signaling a maturing investment cycle.

5. Rise of Deep Tech

Investment will shift toward technically complex startups with defensible intellectual property.

Finally, Saudi Arabia’s venture capital ecosystem is no longer defined by early-stage experimentation. It is entering a phase of strategic deployment, where capital is directed toward sectors that align with long-term economic transformation.

For investors, the opportunity lies in identifying startups that operate at the intersection of technology and national priorities. For founders, success will depend on building solutions that address real market needs while maintaining the scalability required to compete globally.

As one senior policymaker put it: “The future of venture capital in Saudi Arabia is not just about funding innovation—it is about shaping the industries that will define the Kingdom’s economic future.”

In that sense, the next wave of venture capital in Saudi Arabia will not simply follow trends—it will help create them.

Noha Gad

The emergence of social media has transformed global connectivity and information sharing, subsequently driving a major shift in consumer behavior and marketing tactics. In this new landscape, audiences value authenticity above all else when deciding what to buy. This has created fertile ground for influencer marketing, which enables brands to bypass traditional advertising and build trust by collaborating with content creators who have already established loyal, engaged followers.

In Saudi Arabia, the number of people having social media accounts reached 35.33 million as of 2024. A report released by the social media management platform Sprinklr Social indicated that platforms such as X, TikTok, and Snapchat dominate daily life in the Kingdom, with 94.03% of internet users actively engaging with them, which has shaped opinions, trends, and purchasing decisions.

With nearly 95.3% of Saudi Arabia’s population using at least one social media platform, the marketing and advertising market size in the Kingdom reached $3.02 billion in 2025 and is estimated to grow from $3.19 billion in 2026 to reach $4.13 billion by 2031, at a compound annual growth rate (CAGR) of 5.3% between 2026 and 2031, according to recent figures released by Modor Intelligence.

The rise of influencer marketing in Saudi Arabia

In a rapidly changing world, consumer behavior and marketing strategies have evolved as consumers increasingly prioritize authenticity in purchase decisions. This growing demand for authentic and relatable content has facilitated influencer marketing. Around 70% of consumers in Saudi Arabia place more trust in influencers’ recommendations than in traditional advertising. According to Statista, ad spending in Saudi Arabia's influencer advertising market is projected to reach $95.69 million by 2025, with a CAGR of 9.82%, resulting in a market volume of $139.20 million by 2029. These figures underscore the growth of influencer marketing in Saudi Arabia, as brands implement influencers as the primary marketing channel to promote their products and services.

Short-form video content is also increasingly popular on social media platforms in the Kingdom, engaging audiences with concise storytelling, building emotional connections, and enhancing brand recall. Ad spending on short-form videos is anticipated to reach $127.2 million by 2028. 

Regulating influencers economy

Saudi Arabia has implemented a comprehensive, multi-faceted strategy to regulate its influencer economy, moving to formalize the sector, enforce cultural standards, and protect consumer rights. These efforts are led primarily by the General Authority of Media Regulation and are designed to bring transparency and accountability to digital content creation.

In 2022, the authority introduced the Mawthooq license to regulate the status of individuals who provide advertising content on social media platforms. This initiative mandates influencers and creators to register for a license to provide advertisements on social media platforms.

To obtain the Mawthooq license, influencers must comply with the terms and controls set by the General Authority of Media Regulation. This includes adherence to content-related controls, advertisements, classifications (including age ratings), and instructions issued by the authority. These controls apply to citizens, residents, and foreign investors who advertise through social media platforms about a brand, product, service, event, or commercial activity offered or located within the Kingdom. 

Beyond formal licensing, the Kingdom introduced detailed content guidelines that determine what influencers can and cannot post, aiming to align online content with the Kingdom's cultural and religious values. These rules include adhering to modest closing guidelines, protecting privacy and dignity, and ensuring social harmony.

Additionally, the Personal Data Protection Law (PDPL) governs how personal data is collected, processed, and stored. This means that influencers and businesses must obtain explicit consent from individuals before collecting their data through methods like cookies or direct marketing activities. They are also obligated to inform users about the purpose of data collection and their rights regarding it.

The rise of specialized infrastructure players

While social media platforms provide the stage, specialized companies like KLIQ are building the critical back-end infrastructure. KLIQ is Saudi Arabia’s go-to platform connecting brands with the right content creators smartly and seamlessly. This AI-powered platform tackles all common industry frustrations, providing creators with guaranteed payments, clear timelines, and vetted brand opportunities that match their niche. It also solves the problems of delayed payments and difficulty finding quality collaborations. For brands, it offers an intelligent dashboard for data-driven creator discovery and real-time campaign tracking.

Beyond the companies directly involved in campaigns, major international and local advertising agencies are increasingly relying on influencer marketing as a core strategy for their clients. This integration into mainstream marketing budgets provides a steady stream of professional opportunities for creators and validates influencer marketing as a serious and effective channel.

The competitive landscape of the influencers' economy in Saudi Arabia is expected to continue booming, driven by two key trends: AI integration and localized content demand. Companies are betting big on AI to improve creator-brand matching and measure campaign performance, transforming the industry from guesswork to data-driven decisions. AI tools like generative video editors and personalized analytics will dominate, enabling creators to produce hyper-localized Arabic content at scale. Additionally, the growing appetite for localized content reflects a clear preference among audiences for material that resonates with their own experiences, culture, and language, moving away from a one-size-fits-all, globally-focused model.

In summary, Saudi Arabia's creator economy has rapidly evolved from a niche trend into a powerhouse of digital innovation and commerce, aligning perfectly with Vision 2030's ambitious goals. With 35.33 million users in 2024, representing 94% of internet users actively engaging on social media platforms, influencers have become the trusted voice for the majority of consumers, excelling traditional advertising.

Robust regulations coupled with the Personal Data Protection Law (PDPL) have provided the guardrails needed for sustainable expansion. By mandating licensing for commercial promotions, enforcing cultural and modesty standards, and ensuring data privacy through explicit consent, these measures transform influencers from casual posters into professional micro-entrepreneurs, fostering accountability and consumer trust.

Looking ahead, AI-driven tools and the growing demand for culturally attuned content position this ecosystem for explosive growth, reaching $139 million by 2029. Investors, startups, and brands should seize this opportunity to collaborate in a regulated, data-smart landscape where authenticity fuels commerce and innovation thrives.