Events in Turkey have dealt a blow to Saudi ambitions
It’s certain to be a lavish affair. Private jets carrying some of the world’s most powerful men and women will begin landing in the Saudi capital of Riyadh later this month for an exclusive event. As delegates for the annual Future Investment Initiative – the so-called Davos in the Desert – arrive for three days of talks about the future of the oil-rich desert kingdom, there will be plenty for them to talk about.
Their 33 year-old host, Crown Prince Mohammed bin Salman, has no shortage of ambition and will be serving up his usual spiel. Leveraging the kingdom’s vast oil wealth, he wants to transform Saudi Arabia into a technology powerhouse and is sprinkling hundreds of billions of petrodollars into Vision 2030, a pet project to build giant smart cities in the desert, solar power plants stretching to the horizon – as well as big-ticket investments in Silicon Valley and beyond.
Mixing it up in Riyadh will be some of the global technology industry’s greatest luminaries – billionaire investors such as Vinod Khosla, Masayoshi Son and Peter Thiel and executives like Dara Khosrowshahi, the boss of Uber, and Diane Greene, the chief executive of Google Cloud.
But amid the alcohol-free hubbub, the earnest talk of reform and the sci-fi Saudi spin, the Crown Prince should expect some awkward questions.
It’s not merely his decision to delay plans to float Saudi Aramco, the state oil producer – a key plank of Vision 2030. The real talking point among Western delegates – in private, at least – is likely to be the disappearance on Oct 2 of exiled Saudi journalist Jamal Khashoggi after a visit to the kingdom’s consulate in Istanbul.
Saudi Arabia has denied claims he was murdered or kidnapped by a squad of 15 security agents who arrived by air from Riyadh the same day, as Turkey has alleged. But the mystery is fuelling questions about the Crown Prince’s leadership – and whether his vision for the kingdom is a captivating hi-tech dream or a nightmare of repression and control.
When they show up in Riyadh from Oct 23 to 25, will the likes of Richard Branson, Jamie Dimon and Stephen Schwarzman take a stand? Probably not, although a handful may make their excuses and not turn up. On one level, that should come as no surprise.
When faced with the glowing prospect of Saudi Arabia’s privatisation drive and with dozens of potentially lucrative mandates up for grabs, you’d expect Wall Street’s Gordon Gekko-types to park their morals at the door of Riyadh’s Ritz-Carlton Hotel.
Silicon Valley, on the other hand, has traditionally seen these things rather differently. And for all of its ills and the youthful naivety of many of its leading lights, it’s an industry that was undeniably built on the free exchange of ideas and information.
How that squares with the alleged murder of a journalist openly critical of the Saudi regime is a question that should be stirring debate at the highest level in the tech world as it is deluged with Saudi cash.
To be fair on those preparing to travel, some of them probably have little choice but to play along. When Softbank founder Masayoshi Son roped Mohammed bin Salman into the $100bn Softbank Vision Fund two years ago, it was a gigantic coup.
At a stroke, he created easily the world’s biggest buy-out fund – and a piggy bank brimming with Saudi oil money. But the broader consequences of that deal for the tech industry, where the money is being spent, are still playing out.
With tens of billions now flowing into the Vision Fund’s coffers, Saudi cash is sloshing through the tech industry. Already it has become so deeply ingrained in the sector that companies like Uber, British chip maker Arm Holdings and electric vehicle manufacturers Tesla and Lucid are being tightly bound to the prince’s wider objectives and game plan.
They are unlikely to openly criticise a key shareholder with enormous sway to make or break businesses. Others, however, are not yet so compromised. Take Google, which has reportedly discussed the creation of a joint venture to build data centres to help build the backbone of a new tech industry in the kingdom.
In April, the prince took a monthlong extended vacation during which he dropped in on Google co-founder Sergey Brin and chief executive Sundar Pichai as well as Microsoft founder Bill Gates and Amazon’s founder Jeff Bezos. It would be encouraging to believe Google’s parent Alphabet is thinking long and hard about its Saudi plans.
Meanwhile, if MBS’s aim was to forge better relations with the US tech giants, the mystery over Mr Khashoggi may present another headache. Among other newspapers, Khashoggi was an occasional columnist for The Washington Post, a newspaper that Jeff Bezos acquired in 2013.
Either way, if Saudi Arabia fails to convince outsiders the country really is opening up as MBS has promised, he may find the enthusiasm for events like FII starts to cool.
At last year’s inaugural FII, he unveiled plans for a 10,000 sq mile city called Neom, a $500bn (£379bn) project he described as “drone-friendly and a centre for the development of robotics” and “a place for dreamers who want to create something new in the world”.
As terrific as that may sound, it’s questionable how many dreamers will want to live there if Saudi Arabia remains a place where autocrats exercise unchecked, ruthless power – and journalists disappear for dismemberment by their security agents.
‘With tens of billions now flowing into the Vision Fund’s coffers, Saudi cash is sloshing through the tech industry’