Saudi Arabia’s Digital Government Authority (DGA) has detailed a massive SAR 31.9 billion ($8.5 billion) government spend on information and communication technology (ICT) for 2025. The authority’s latest Government Spending Report on ICT Services highlights a significant strategic pivot, with substantial increases in investment directed towards artificial intelligence and cloud computing as the Kingdom moves beyond foundational infrastructure projects.
Quick Facts
- $8.5 billion total government ICT spending in 2025.
- Cloud computing expenditure jumped by 42 percent.
- AI and emerging tech spending rose 20 percent.
From Infrastructure to Intelligence: A Strategic Spending Shift
The report reveals a clear change in investment priorities. While total spending reflects increased efficiency after completing major digital infrastructure projects in previous years, the allocation of funds shows a decisive move toward advanced technologies. Government spending on AI and emerging technologies saw a 20% year-over-year increase, while cloud computing expenditure surged by 42%.
This shift indicates that Saudi Arabia’s digital government has entered a more mature phase. Having established its core digital backbone, it is now aggressively adopting intelligent technologies to enhance services and efficiency. This aligns with a DGA index published in April, which found that 76% of government entities are prepared to adopt and activate emerging technologies.
Fueling the Local Tech Scene: SMEs Secure $2.46B in Contracts
The massive government outlay is creating significant economic ripple effects. According to the DGA, the spending generated over SAR 9.5 billion ($2.53 billion) in direct economic value added and an additional SAR 3.5 billion ($930 million) in indirect impact, supporting the creation of more than 7,000 jobs.
Crucially, the report underscores a deliberate policy to integrate the local private sector. Small and medium-sized enterprises (SMEs) captured 29% of the total ICT contract value, amounting to approximately SAR 9.23 billion ($2.46 billion). Furthermore, local contracts accounted for 49% of all government software procurement, a strong indicator of the Kingdom’s growing domestic digital capabilities.
Cementing Global Leadership in Public Sector AI
The DGA connects this accelerated ICT spending directly to Saudi Arabia’s goal of maintaining its top-tier global ranking in digital government. The Kingdom was ranked first on the Tortoise Intelligence Government Strategy Index for Artificial Intelligence in 2023, surpassing both Germany and China.
Further data from the Public Sector AI Adoption Index 2026, published by UK-based Public First, ranked Saudi Arabia first globally across all five dimensions of AI adoption. The index found that approximately two-thirds of Saudi government workers use AI tools daily, and 77% report that their organization has invested in AI infrastructure, solidifying its position as an “Advanced Adopter” alongside Singapore and India.
About the Digital Government Authority
The Digital Government Authority oversees digital transformation across all Saudi government entities, setting technical standards, supervising government cloud governance, building national digital capabilities, and supporting public and private entities with digital government services.
Source: Middle East AI News
