Saudi Arabia’s Public Investment Fund (PIF) asked the kingdom’s richest families to invest more in projects inside the country as it reassesses or cancels major mega-projects, according to a report by Bloomberg on Tuesday.
The report said that the PIF and Ministry of Investment, along with other government entities, held a meeting on the Red Sea coast with some of the richest families, where they were asked to “collaborate” on more projects and partner more readily with foreigners eyeing investments in Saudi Arabia.
The report comes as Saudi Arabia either scales down or delays big-ticket mega-projects that were heralded as a key feature of Crown Prince Mohammed bin Salman’s Vision 2030 to remake the oil-rich kingdom’s economy.
Reuters reported on Tuesday that Saudi Arabia had suspended construction of the Mukaab, a giant cube-shaped structure that was set to be built in downtown Riyadh. Saudi authorities also announced over the weekend that Trojena, a planned ski resort in Neom, was being downsized and would no longer host the 2029 Asian Winter Games.
The Financial Times has also reported that the Neom megacity project, the centrepiece of which was a 170km straight-line city, is being significantly downscaled and redesigned.
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Saudi Arabia’s shift requires some context. The kingdom floated highly ambitious projects that economists and engineers repeatedly doubted in terms of feasibility and future financial returns.
Experts tell Middle East Eye that Saudi Arabia is right-sizing its ambitions to focus on sectors where it has a competitive advantage. The kingdom has purchased advanced AI chips from Nvidia and is building data centres from the Red Sea to Riyadh and Dammam.
Because of its bountiful fossil fuel supplies, commercial electricity prices in Saudi Arabia are anywhere from 30 to 50 percent cheaper than the global average, experts say.
It is also leaning on mining and tourism. In January, Saudi Arabia rolled out new laws to allow foreigners to buy property there.
Under Crown Prince Mohammed bin Salman, it is still pushing ahead with plans to diversify its economy away from a reliance on oil revenue. The non‑oil economy now makes up more than 55 percent of real GDP and is outperforming the total GDP.
The International Monetary Fund raised its 2026 GDP growth forecast for Saudi Arabia from four percent to 4.5 percent, which would put it in the top tier of G-20 economies.
However, the kingdom faces serious headwinds. Foreign investors never bought into grandiose projects like Neom, leaving the $ 1 trillion PIF to carry most of the weight.
International debt markets
For now, the kingdom is still reliant on oil revenue to fund its ambitious projects. Oil accounts for roughly 61 percent of Saudi Arabia’s revenue, according to its 2025 budget. But prices are hovering at around $60 per barrel, well below the $100 per barrel level that economists say Saudi Arabia needs to balance its budget.
To plug that gap, Saudi Arabia has tapped international debt markets. In 2024, it overtook China as the most active issuer of international debt in emerging markets. In January 2026 alone, Saudi Arabia sold more than $20bn of international bonds.
There has been strong demand for Saudi debt. The country’s overall debt-to-GDP level is low, and it has a guaranteed stream of revenue from oil exports.
But there are some signs that liquidity inside Saudi Arabia is tightening. Crown Prince Mohammed bin Salman has pushed for state-owned banks to lend more to private businesses and young home buyers.
Banks have also had to turn to debt markets, especially with Saudi Arabia imposing higher capital requirements.
Saudi Arabia could be looking for the investment offices of wealthy families to fill that gap. These families control billions of dollars and could step in to fill the space left by state-owned banks.
The Bloomberg report did not mention any tension between wealthy families and Saudi finance officials. But the crown prince does have a history of leaning on them for funds.
In 2017, the crown prince had wealthy families corralled at the Riyadh Ritz-Carlton, in what was characterised as a corruption purge by Mohammed bin Salman, where they were ordered to pay billions of dollars to the kingdom.
The list included high-flyers such as billionaire Alwaleed bin Talal and lesser-known royals. Those who did not pay were moved to prisons. The Wall Street Journal reported that some were repeatedly beaten.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
