What’s happening at this year’s ‘Davos in the Desert’

Saudi Arabia’s eighth Future Investment Initiative (FII) summit wraps today, so we thought you might be interested in a pithy summary of the event’s main takeaways, perhaps with some medium-quality lols sprinkled throughout (no guarantees). 

But first, some context. The FII is a yearly summit bringing together leaders in the tech, finance, and policymaking world. Its all-star line-up, billion-dollar themes, and exclusive location have earned it the nickname ‘Davos in the desert’.  

This year’s FII is again happening around the Ritz Carlton Riyadh, where the kingdom’s crown prince (‘MBS’) famously detained hundreds of fellow Saudi royals and senior officials for a forced vacation during his 2017 power grab. FII attendance dipped after that episode, then dipped again after Saudi agents dismembered a dissident in 2018.

But the business world has a remarkable capacity to forgive and forget when there’s cash on the line, and you can see that in the thousands of big name attendees at this year’s opening lights show and moving opera performance. But we digress. 

Here are four of the most interesting quotes from this year’s summit. 

1. “Now our target is to bring [international investment] down to a range between 18 to 20 per cent” – Saudi Public Investment Fund governor Yasir al-Rumayyan

It’s not often you hear someone setting a target to decrease investment. So what’s up? With an economy reliant on exporting fossil fuels, the Saudis long invested their profits abroad through their sovereign wealth fund, the $1T-strong Public Investment Fund.

But Governor al-Rumayyan says his fund will curb total foreign investments from a peak of 30% in 2020 to a 20-18% range moving forward. The decision reflects the kingdom’s new strategy that prioritises investments within Saudi Arabia to put its economy on a more sustainable path, and particularly to finance the crown prince’s ‘Vision 2030’. Tough luck for any ailing European football clubs hoping for some sweet Saudi cash.

2. “We are at that moment of peak uncertainty. It is a race that Trump is favoured to win but it is almost a coin toss” – Citadel founder Ken Griffin

The US elections have dominated much of the water cooler banter at this FII, though business leaders are typically cautious about what (if anything) they say in public. So it’s been interesting to see how different US tycoons have handled the topic on stage.

• Citadel’s Ken Griffin (who’s donated $100M to Republican PACs this cycle but hasn’t endorsed a candidate) dared to call a favourite above, but otherwise he just noted the uncertainty
• BlackRock’s Steve Schwarzman (who’s backing Trump after distancing himself in the wake of January 6th) declined to call a winner, though still snuck in a plug, saying he thinks Trump 2.0 “is in a much better base of knowledge” than Trump 1.0, and
• Goldman’s David Solomon took the ultimate safe option, which is just to state literal, vanilla-flavoured facts: “We do have an election and there will be policy decisions coming out. Those will have an impact on the trajectory in 2025 and 2026.” Hold the front page. And rather than plug a candidate, Solomon then did the ultimate Goldman thing: he plugged Goldman, saying the bank is well placed for either outcome.

3. “The cost of autonomy is falling so quickly that the drone war, which is the future of conflict, will get rid of eventually tanks, artillery, mortars” – former Google CEO, Eric Schmidt

Folks have been much more willing to speak their mind on the other hot topic this year: AI. Some of the more interesting insights came from former Google CEO Eric Schmidt, who shared some intriguing deets on his latest venture (White Stork) building AI-enhanced military drones.

The firm has apparently already tested its gear on the battlefield in Ukraine, and the initial results have left Schmidt betting that these cost-effective weapons will rapidly transform the way we wage war: “The guns should be automated, and the people should be drinking coffee somewhere else”. Sounds a bit like BattleBots to us, but ok. 

4. “We will monetise every molecule of energy this land has, period” – Saudi Energy Minister Prince Abdulaziz bin Salman

Two weeks out from the next COP climate talks in fellow petrostate Azerbaijan, the above line is a reminder not just to look at what climate ministers say in Baku, but also what energy ministers say back home. And it’s the energy ministers who’ll typically be closest to power.

But of course, researchers keep publishing the evidence about our carbon sinks not working, our critical Atlantic currents approaching collapse, and our weather getting wilder. So at some point, the energy transition must merge the role of energy and climate minister (it’s already happened in several capitals) as tech helps de-conflict the two priorities. But oil exporters are clearly in no hurry.

INTRIGUE’S TAKE

There are lots of good reasons to head to Riyadh this time of year: the lovely +30°C temperatures, the avant-garde architecture, plus the Ritz buffet slaps, too. 

So it’s interesting to look at who’s not there. And surprise surprise, the Emiratis (UAE) skipped it. It’s another reminder of their growing behind-the-scenes rivalry, driven by oil (the Emiratis resent Saudi dominance of OPEC); security (they increasingly back different players in the region); Israel (only the Emiratis have joined the Abraham Accords); and vision (they both have ‘Vision 2030’ plans, putting them in direct competition for regional investment, prestige, and leadership).

One of the things these two rivals still have in common, however, is discomfort around the very same thing that’s hardly been mentioned in Riyadh this week: the Israel-Hamas-Hezbollah war. With both the Saudis and Emiratis racing to diversify and modernise, a regional war is the last thing they want investors worrying about.

Also worth noting: 

• The Emiratis released their Vision 2030 way back in 2008. The Saudis then launched their own Vision 2030 in 2016.
• A new documentary (just released on Sunday) claims 21,000 labourers have died working on the Saudi Vision 2030.