The 2nd LEAP tech conference (LEAP 2023), organised by the Saudi Ministry of Communications and Information Technology (MCIT), was held from 6-9 February 2023. The three-day conference took place in Riyadh and saw a host of landmark partnerships and billion-dollar investments, which elevated the Kingdom’s foreign direct investment, localised technology, and advanced its digital transformation plan in line with the objectives of Vision 2030 goals.
In parallel to LEAP 2023, the Saudi Data and Artificial Intelligence Authority (SDAIA) hosted the AI event DeepFest, aiming to support the implementation of the Kingdom’s national digital transformation strategy.
Both events and their subsequent announcements have laid a solid foundation for global ICT companies’ business expansion in the country. To reap the full benefits of technology, however, Saudi Arabia will need to ensure the implementation of forward-looking regulations that support and protect citizens when engaging with emerging technologies.
The investments announced at LEAP 2023 surpass the $6.4 billion announced at the inaugural LEAP 2022 edition. On the opening day of the conference, Saudi Minister of Communications and Information Technology, H.E. Eng. Abdullah Alswaha, announced the following investments:
- $9 billion of investments from international companies, including Microsoft, Oracle, Meta, Huawei, and Zoom, to work with the Kingdom.
- At least $2.43 billion to assist emerging technologies and digital entrepreneurship.
- $580 million worth of new investments for opening new data centres and tech academies.
- An additional $4.5 billion in global and local assets across multiple sectors.
Cloud infrastructure was among the major topics at LEAP 2023, as evidenced by the major investment deals signed during the event – the most notable of which being Microsoft’s announcement to build a local hyperscale cloud infrastructure in the Kingdom worth $2.1bn. In response to growing customer demand for cloud services, Huawei also announced an investment of $400 million in cloud infrastructure for its services in the Kingdom. Simultaneously, the Chinese tech giant Lenovo launched the Lenovo Center for Creativity and Innovation project to enhance cooperation and digital transformation in the country.
The increased investment from Chinese companies is a result of improved Saudi-Sino relations following China’s President Xi Jinping’s state visit in December 2022, which led to more than 40 deals on energy, artificial intelligence, and cloud services. The close Saudi-Sino relations were further manifested at LEAP 2023 through the launch of the Saudi Arabia-China Entrepreneur Association (SCEA)1, which aims to enhance private sector cooperation and trade between the two countries.
As such, the heightened demand for cloud computing services in Saudi Arabia is expected to have a double effect: (i) enhance the position of Saudi Arabia as one of the largest digital markets in the region, and (ii) accelerate competition between US and Sino companies in the market.
The metaverse is projected to contribute about $15 billion to Gulf Cooperation Council (GCC) economies annually by 2030. In terms of countries, Saudi Arabia will stand to gain most from the metaverse ($7.6billion), followed by the UAE ($3.3billion). Therefore, initiatives on shaping the metaverse ecosystem were paramount during LEAP 2023:
- Meta Platforms announced the launch of the MENA region’s first metaverse academy in Saudi Arabia which aims to accelerate the development of emerging technologies.
- KPMG announced the establishment of its Center of Excellence (CoE) for metaverse and digital twins which aims to bring together a consortium of companies:
- Microsoft – to leverage the company’s infrastructure and gaming platforms.
- Ericsson – to leverage the company’s 5G technology and network.
- Metakey – to leverage the company’s technical capabilities in developing 3D objects.
Other than creating a business-enabling environment, Saudi Arabia is seeking to build a sustainable and invigorated economy by involving multinational corporations in talent cultivation, as highlighted by the above-mentioned announcements. The Kingdom, along with the UAE, Qatar, and Bahrain, already have regulations in place and programmes encouraging the use of metaverse technologies. Coupled with the youthful age of Saudi Arabia’s population, this means that the stage is set for smooth adoption in the Kingdom.
With the successful 2022 and 2023 editions of LEAP, the conference has emerged as a major global tech event, establishing Saudi Arabia as a leading digital economy in the Middle East and North Africa. The major deals signed at LEAP underpin the importance of the conference in increasing foreign direct investment to the Kingdom – a key driver for the country’s economic diversification efforts in line with Vision 2030.
The metaverse and cloud sectors are expected to play a significant role in Saudi Arabia’s digital transformation initiatives as part of the country’s transition to a knowledge-based economy. Moreover, the above-mentioned LEAP 2023 developments are expected to drive new regulatory frameworks in the Kingdom to keep pace with the evolving technology landscape.
Access Partnership is closely monitoring technology, regulatory and policy developments in all regions. For more information please contact Rati Kvantaliani at firstname.lastname@example.org.