Due to its lax immigration laws, attractive incentives for foreign companies and labour, and absence of personal income tax, the United Arab Emirates has long been the preferred hub for technology in the Middle East.

However, Saudi Arabia has made it clear on the Davos Promenade this year that it wants to steal some of the talent and attention from its neighbour on the Arabian Peninsula.

In addition to two more Saudi chalets, the Saudi delegation made a big impression on the city’s main street. They set up an expansive storefront to promote Neom, a new urban development in northwest Saudi Arabia, and the AlUla project, an initiative that is part of the kingdom’s push to make the heritage city a popular tourist destination worldwide. They also set up a pop-up for the Saudi crown prince’s Foundation, MiSK, and its youth ambassadors, known as “majlis.” All of this is a component of the nation’s economic diversification Vision 2030 plan.

One of the promenade’s most notable exhibits of the year, the Neom exhibition aims to highlight the development’s potential as a destination for luxury living, tourism, and innovation.

According to a Neom representative, the increased visibility was intended to inform the investing community about the project and signal that it is “open for business.”

The nation’s finance minister repeated that opinion on Monday. On the fringes of the World Economic Forum, Mohammed al-Jadaan informed CNBC that the share of oil in the GDP has dropped from 70% to between 30% and 35%.

“That is significant,” said al-Jadaan, adding that the country has diversified into multiple other sectors, including tourism, technology and logistics.

His remarks are part of a larger effort to raise the kingdom’s stature as a player and negotiator on the international scene. Riyadh, the capital city, is holding a unique World Economic Forum in April. According to Al-Jadaan, Riyadh “thinks we can bridge the gap,” adding that it has “a very strategic relationship with the U.S. and we have a close relationship with China.”

A number of “giga” initiatives, including Neom, make up Crown Prince Mohammed bin Salman’s Vision 2030 agenda. Some concentrate on making significant infrastructural expenditures, while others try to draw in fintech talent from nearby and beyond.

When MBS originally assumed the role of crown prince, Ian Bremmer, the president and founder of Eurasia Group, a political risk consultancy, expressed scepticism; but, he has now come to believe in the shift that MBS is spearheading.

“He’s driving entrepreneurship, he’s diversifying the economy … And there are a lot of people that are really interested in working in Saudi Arabia,” said Bremmer. “This is a guy that’s actually really tried to combat a lot of visible corruption in the royal family. And more broadly, he is actually improving education, especially for women.”

“We are well past the Khashoggi chapter on the Kingdom,” Bremmer added, referring to the operation to capture or kill journalist Jamal Khashoggi in 2018 in the Saudi Consulate in Istanbul.

For the first time, the Saudi economy has surpassed the $1 trillion mark. According to data from the World Bank, the UAE’s economy is half that size, at just over $500 billion. Despite this, the UAE has a considerable advantage because hundreds of millions of dollars are invested in its Advanced Research Technology Centres, which include hubs for generative artificial intelligence, cyber, quantum, and biotech.

However, the kingdom is also heavily investing in its goals to become a tech hub.

The eye-catching megacities that MBS is building in the desert are the focus of much of the excitement surrounding its large investments, but local experts in Davos said that’s only a side effect of the company’s primary goal, which is to draw talent to fuel a value creation cycle in AI.

Lead by a UCLA mathematician, the King Abdullah University of Science and Technology, or KAUST, was established to start drawing talent to the nation to support this innovation.

KAUST stated in a statement that it is “aligned with Saudi Arabia’s goal to be a global AI leader by 2030” and that it is working towards that goal through strategic partnerships, highlighting the creation of an AI-powered National Strategy that supports startups and the International Centre for AI Research and Ethics (ICAIRE) in Riyadh, as well as the AI research centre run by Saudi Aramco that focuses on cutting-edge projects in the oil and gas industry.

“KAUST contributes through its own AI Initiative and hosts the SDAIA AI Center,” added the university, referring to the Saudi Data and Artificial Intelligence Authority, which oversees its efforts in the field of AI.

Vera Futorjanski lived and worked in Riyadh for many years. She was a member of the group that used the MiSK 500 accelerator to help establish the city’s entrepreneurial ecosystem.

“The big differentiator Saudi has, that in my opinion could lead to its success on the global stage including in the AI race, is the fact that it has the needed resources, flexibility on the regulations, and a large Saudi population who are young, educated, and hungry for innovation,” said Futorjanski, who is the CEO and founder of Veritas Ventures, a global strategic advisory firm.

The CEO of SandboxAQ, a business that was separated from Google’s parent Alphabet in 2022 and uses AI and quantum technology to address important issues in drug research, cybersecurity, and other fields, is Jack Hidary. The revolutionary influence of AI, according to Hidary, “well beyond even the mobile phone.”

“In the Emirates and in Saudi Arabia, you have millions of people that need upskilling, particularly Saudi Arabia which has a much larger population,” Hidary said. “AI-driven personalized education and training, that is a game changer when it comes to that.”

Recently back from Saudi Arabia, Hidary says the UAE and Saudi Arabia are looking at tech-driven nations like Israel and Singapore that have backed start-ups.

“Singapore and Israel did not have any natural resources, but they had the natural resource of smart people driving technology and innovation, and that’s what Saudi Arabia and Emirates are now looking at very intently and driving programs to make that happen,” Hidary said.

(Adapted from CNBC.com)