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While there was no official comment from Aramco, the kingdom\u2019s energy ministry confirmed the strike had caused a limited fire and no injuries, though it was unclear whether the building in the eastern city of Dhahran had been hit directly by a missile or by falling debris.\u00a0<\/p>\n
Authorities also reported drones and missiles were intercepted and destroyed near the capital, Riyadh, and the country\u2019s southern region.\u202f\u00a0<\/p>\n
As the kingdom\u2019s conflict with the Iran-backed Houthis intensifies, questions are mounting over whether its much-vaunted Vision 2030 is increasingly out of reach.\u00a0<\/p>\n
For a country whose future hinges on diversifying away from oil and attracting foreign investment to help it do so, the spillover effects of the conflict pose a significant setback to its ambitions.\u00a0<\/p>\n
\u201cThe events of recent weeks are serious,\u201d Saudi Energy Minister Prince Abdul Aziz bin Salman told the World Petroleum Energy Congress in Riyadh on Monday. \u201cOur response must be equally serious while remaining focused on the decades ahead; Vision 2030 must continue, investment must continue.\u201d\u00a0<\/p>\n
Exactly what a \u201cserious response\u201d entails remains unclear, but what is immediately apparent is that investor sentiment has already been rattled.\u202f\u00a0<\/p>\n
The CEOs of Shell, TotalEnergies, BP, and ExxonMobil had all been due to attend this week\u2019s WPEC but are conspicuous by their absence.\u202f\u00a0<\/p>\n
I was due to travel to Jeddah this week for interviews and an event, but, like many others, plans were canceled given the security situation.\u00a0<\/p>\n
According to the Wall Street Journal, the Saudi crown prince, Mohammed bin Salman, has been moved between heavily guarded palaces fitted with bunkers by a handpicked security team.\u202f\u00a0<\/p>\n
During the course of the last week, many of the kingdom\u2019s most strategic assets have become high-profile targets. Most notably, King Khalid International Airport in Riyadh suffered four attacks in the space of five days. The Saturday attack marked the deadliest attack on Saudi soil in more than a decade, killing 13 people and injuring 309.\u202f\u00a0<\/p>\n
James Reeve, a Saudi macro consultant who formerly worked as a senior director for the Saudi Public Investment Fund, told me that foreign investments already made in Saudi are unlikely to be reversed in the near term.\u202f\u202f\u00a0<\/p>\n
\u201cI think more troubling for the Vision 2030 story is the impact on new FDI (foreign direct investment)\u202finflows,\u201d said Reeve.\u202f\u00a0<\/p>\n
\u201cFor foreign firms weighing up significant capital investments in the Kingdom, the images of missiles falling apparently unhindered on the capital\u2019s airport will be shocking and difficult to forget. Those contemplating investments in tourist infrastructure will also have to weigh the impact on tourism inflows.\u201d\u00a0<\/p>\n
On Monday, Saudi authorities extended the airport\u2019s closure until Saturday, and regional carriers have temporarily suspended flights.\u202f\u00a0<\/p>\n
Meanwhile, Air France-KLM has suspended flights to Riyadh until 31 October and Delta Air Lines has delayed planned services from Atlanta to Riyadh, initially due to start on October 23, until March 2027.\u00a0<\/p>\n
\u201cIn the short term, this is clearly damaging,\u201d Andreas Krieg, a Middle East security analyst at King\u2019s College London, told me.\u202f\u00a0<\/p>\n
\u201cThe important effect is not simply physical damage to an airport or the cancellation of individual flights. It is the return of a security premium to doing business in Saudi Arabia. The immediate consequences are likely to be delayed investment decisions, higher required returns, and greater dependence on state capital.\u201d\u202f\u00a0<\/p>\n
As one of the principal gateways into the Saudi capital and a foundation stone of the entire Vision 2030 project, the Houthi attacks on Riyadh\u2019s airport directly threaten the Kingdom\u2019s strategy. It wants to become a global centre for business, logistics, tourism, hospitality and major global events, including the Expo 2030 and the FIFA World Cup in 2034.\u00a0<\/p>\n
Before the current attacks, the airport handled roughly 110,000 passengers a day \u2014 similar in scale to Miami International airport. It is also the base of Riyadh Air, a new airline backed by Saudi\u2019s PIF, which seeks to establish the city as a major transport hub to rival Dubai and Doha.\u00a0<\/p>\n
These latest developments come as Riyadh is already grappling with rising fiscal challenges.\u202f\u00a0<\/p>\n
The Kingdom recorded a fiscal deficit of 160 billion riyals ($42.7 billion) in the first half of 2026, up 71% from 93 billion riyals a year earlier, as it increased spending to prop up growth amid the ongoing U.S.-Iran war.\u00a0<\/p>\n
Earlier this month, the Finance Ministry raised its estimated 2026 budget deficit by 48% to 245 billion riyals ($65.33 billion), equivalent to 4.9% of GDP.\u202f\u00a0<\/p>\n
Such revisions and forecasts may now be due for another downgrade.\u202f\u00a0<\/p>\n
However, Krieg said it is premature to start calling into question the credibility of Saudi\u2019s long-term economic plans.\u202f\u00a0<\/p>\n
\u201cI would not extrapolate from several weeks of disruption to the collapse of Vision 2030,\u201d he said.\u202f\u00a0<\/p>\n
\u201cSaudi Arabia has enormous fiscal resources, deep domestic capital pools and the ability to keep strategic projects moving even when private capital becomes cautious. The long-term effect depends almost entirely on duration.\u201d\u202f\u202f\u00a0<\/p>\n
Reeve also said that the extent of damage to investor confidence will be directly linked to the duration of the conflict and that the onus will now be on the government to reassure investors.\u202f\u00a0<\/p>\n
\u201cForeign investors are unlikely to up sticks at this point,\u201d he said. \u201cThey will want to see how long the strikes last and how the government and PIF might respond in terms of loosening the purse strings to shore up confidence.\u201d\u202f\u00a0<\/p>\n
But he was more pessimistic overall, adding: \u201cAll in all, I think current events are quite a big blow to the Vision 2030 thesis.\u201d\u202f\u00a0<\/p>\n
The kingdom\u2019s flagship business summit, the Future Investment Initiative (FII), dubbed \u2018Davos in the desert\u2019 is due to be held in under two weeks. It will be the most immediate litmus test of investor sentiment towards the kingdom.\u202f\u00a0<\/p>\n
On Tuesday, Reuters reported that Riyadh was planning to make FII a hybrid event, giving executives the option to take part remotely.\u202f\u00a0<\/p>\n
In previous years, applications to FII were tightly vetted, making it one of the hottest tickets in town, attracting Wall Street titans such as BlackRock, Goldman Sachs and JPMorgan.\u202f\u00a0<\/p>\n
Just over three months ago, PIF\u2019s governor Yasir Al-Rumayyan told a packed auditorium at the FII\u2019s Priority\u202fEurope summit\u202fin Rome\u202fthat the sovereign wealth fund\u2019s strategy is \u201cto bring the world back to Saudi\u201d.\u202f \u00a0<\/p>\n
With missiles raining down and travel warnings in place, the world will first need to be reassured that it is safe. \u202f\u00a0<\/p>\n
Melissa Hancock<\/p>\n
And as ever, thanks for reading, and do keep in touch with your thoughts and ideas.
melissa.hancock@fortune.com\u00a0<\/p>\n
Abu Dhabi advances AI ambitions\u202fAbu Dhabi is betting on AI to help the government run better\u00a0<\/p>\n
Last week, Abu Dhabi joined forces with tech giants OpenAI and Microsoft to launch AiNative, an AI training program that aims to train 20,000 government employees\u202fas part of its ambition to become the world\u2019s first AI-powered government by 2027.\u00a0<\/p>\n
The program\u2014announced at the Ai Everything conference in the capital\u2013will give government employees hands-on experience with tools such as ChatGPT, Codex, and Microsoft 365 Copilot.\u202f\u00a0<\/p>\n
Later phases will offer more specialized training and certifications tailored to specific roles, including coding and data.\u00a0<\/p>\n
Citizens and residents will also benefit from aspects of the training program that cover practical applications of AI in everyday life, including managing personal finances, running a small business, and finding a job.\u202f\u00a0<\/p>\n
AiNative forms part of Abu Dhabi\u2019s AED 13 billion ($3.5 billion) Digital Strategy 2025\u20132027, which seeks to strengthen AI adoption and digital infrastructure, automate 100% of government processes, and deploy sovereign cloud computing across all government operations.\u00a0<\/p>\n
By 2027, the strategy is projected to generate more than AED 24 billion ($6.54 billion) in economic value for the emirate.\u202f\u202f\u00a0<\/p>\n
It forms part of a broader shift in the UAE\u2019s approach to AI, moving beyond investment in the technology to embedding it into how government and society function.\u00a0<\/p>\n
Speaking to Fortune contributor, Inzamam Rashid, at the Ai Everything conference in Abu Dhabi last week, Ruba Al Hassan, director general of strategic affairs and future foresight at Abu Dhabi\u2019s Department of Government Enablement, explained how she is working to automate routine administrative tasks such as licence renewals and utility payments through the emirate\u2019s AutoGov service.\u00a0<\/p>\n
You can read Rashid\u2019s full interview with Al Hassan and what it means for Abu Dhabi\u2019s AI-powered government vision here.\u00a0<\/p>\n
SoftBank courts Gulf investorsSoftBank looks to revive Gulf backing for its AI investments\u00a0<\/p>\n
SoftBank Group CEO Masayoshi Son, is said to be targeting up to $100 billion in funding from Gulf investors to bankroll a fresh wave of AI investments.\u00a0<\/p>\n
Son has held talks in \u2060recent weeks with senior figures, including \u200bin the UAE, about the \u200bpotential fundraising, the FT reported.\u202f\u00a0<\/p>\n
As part of the potential Gulf-backed fundraising, the SoftBank founder would use the money to establish a fund that would acquire companies and enhance their operations with AI and other advanced technologies.\u00a0<\/p>\n
Saudi\u2019s Public Investment Fund and Abu Dhabi\u2019s Mubadala were major backers of SoftBank\u2019s inaugural $93 billion Vision Fund, launched in 2017.\u202f\u202f\u00a0<\/p>\n
Since its launch, the first Vision Fund had accumulated about $29 billion in investment gains by the end of June. Vision Fund 2, launched more recently and funded primarily by SoftBank, has generated $20.5 billion in gains.\u202f\u00a0<\/p>\n
However, the first Vision Fund has also suffered a series of high-profile setbacks among its bets on so-called \u201cdisruptor\u201d startups, most notably WeWork, which filed for bankruptcy and underwent a major debt restructuring. It led to SoftBank earning the less-than-desirable moniker \u201cNasdaq whale\u201d for its role in fuelling a frenzied rally in big tech stocks.\u00a0<\/p>\n
As highlighted in last week\u2019s newsletter, OpenAI is reportedly in talks with several UAE investment funds, including Abu Dhabi-based MGX, to anchor a $30 billion fundraising round for the company.\u202fThe UAE funds may invest as a consortium and are discussing a combined investment of up to $10 billion.\u202f\u00a0<\/p>\n
The Big Number-4.3\u00a0<\/p>\n
Last week, the World Bank revised its real GDP forecast for the GCC to\u202f\u00a0a -4.3% GDP contraction versus a previous forecast of 1.3% growth.\u202fThe biggest downward revisions were for Qatar to -21% (from -6%) and Kuwait to -15% (from -6%).\u202f\u00a0<\/p>\n
The 3 things we enjoyed reading this week
\nA series of strategic miscalculations dragged Saudi back into war in Yemen, as CNN explores in this analysis piece. Riyadh\u2019s split with the UAE, failure to coordinate effectively with allied Yemeni forces, and overreliance on U.S. military support have left it vulnerable to an increasingly powerful Houthi movement backed by Iran. Despite seeking international support and launching a new military offensive, Saudi Arabia faces a conflict with no clear endgame, as fragmented allies and unresolved regional tensions make a lasting solution hard to achieve.\u202f\u00a0<\/p>\n
\u00a0<\/p>\n
The Middle East has seen several significant archaeological discoveries in 2026, revealing new insights into ancient civilizations and the region\u2019s rich history. Highlights include a Bronze Age communal tomb in Al Ain, a potentially lost Egyptian city linked to Pharaoh Ramses II, and a rare Assyrian royal monument uncovered in Iraq. In Egypt, an underwater excavation in Alexandria uncovered a bronze ring depicting the legendary Lighthouse of Alexandria, while prehistoric rock art in Sinai reveals thousands of years of human activity.\u202f\u00a0<\/p>\n
\u00a0<\/p>\n
A new 18-month partnership between NYU Abu Dhabi and the U.S. State Department will bring together 30 graduate students from the UAE and U.S. to design and build lunar rovers. The project will draw on the UAE\u2019s growing space capabilities, including locally developed lunar soil simulants and testing facilities, to tackle challenges such as abrasive Moon dust. Beyond supporting the UAE\u2019s lunar ambitions, the initiative aims to develop skilled engineers, strengthen scientific ties between the two countries and create opportunities for future research and commercial innovation. The benefits of space exploration extend well beyond the Moon, potentially driving advances in energy storage, electric vehicles and other technologies on Earth.<\/p>\n
#growing #security #premium #threatens #Saudi #Arabias #investment #project<\/p>\n","protected":false},"excerpt":{"rendered":"
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